Correlation Between Power Assets and Keppel
Can any of the company-specific risk be diversified away by investing in both Power Assets and Keppel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Power Assets and Keppel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and Keppel Limited, you can compare the effects of market volatilities on Power Assets and Keppel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Power Assets with a short position of Keppel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and Keppel.
Diversification Opportunities for Power Assets and Keppel
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Power and Keppel is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and Keppel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keppel Limited and Power Assets is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Power Assets Holdings are associated (or correlated) with Keppel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keppel Limited has no effect on the direction of Power Assets i.e., Power Assets and Keppel go up and down completely randomly.
Pair Corralation between Power Assets and Keppel
Assuming the 90 days horizon Power Assets is expected to generate 1.28 times less return on investment than Keppel. But when comparing it to its historical volatility, Power Assets Holdings is 2.35 times less risky than Keppel. It trades about 0.09 of its potential returns per unit of risk. Keppel Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Keppel Limited on September 21, 2024 and sell it today you would earn a total of 25.00 from holding Keppel Limited or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Power Assets Holdings vs. Keppel Limited
Performance |
| Timeline |
| Power Assets Holdings |
| Keppel Limited |
Power Assets and Keppel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and Keppel
The main advantage of trading using opposite Power Assets and Keppel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets position performs unexpectedly, Keppel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Keppel will offset losses from the drop in Keppel's long position.| Power Assets vs. Energy of Minas | Power Assets vs. Avista | Power Assets vs. Allete Inc | Power Assets vs. The AES |
| Keppel vs. Singapore Telecommunications PK | Keppel vs. United Overseas Bank | Keppel vs. DBS Group Holdings | Keppel vs. Power Assets Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |