Correlation Between Highlight Communications and Keck Seng
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Keck Seng 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 Highlight Communications and Keck Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Keck Seng Investments, you can compare the effects of market volatilities on Highlight Communications and Keck Seng 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 Highlight Communications with a short position of Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Keck Seng.
Diversification Opportunities for Highlight Communications and Keck Seng
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highlight and Keck is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of Highlight Communications i.e., Highlight Communications and Keck Seng go up and down completely randomly.
Pair Corralation between Highlight Communications and Keck Seng
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 0.99 times more return on investment than Keck Seng. However, Highlight Communications AG is 1.01 times less risky than Keck Seng. It trades about 0.18 of its potential returns per unit of risk. Keck Seng Investments is currently generating about 0.01 per unit of risk. If you would invest 98.00 in Highlight Communications AG on October 30, 2024 and sell it today you would earn a total of 51.00 from holding Highlight Communications AG or generate 52.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Keck Seng Investments
Performance |
| Timeline |
| Highlight Communications |
| Keck Seng Investments |
Highlight Communications and Keck Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Keck Seng
The main advantage of trading using opposite Highlight Communications and Keck Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Keck Seng 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 Keck Seng will offset losses from the drop in Keck Seng's long position.| Highlight Communications vs. Keck Seng Investments | Highlight Communications vs. Gladstone Investment | Highlight Communications vs. CENTURIA OFFICE REIT | Highlight Communications vs. NURAN WIRELESS INC |
| Keck Seng vs. DETALION GAMES SA | Keck Seng vs. TEN SQUARE GAMES | Keck Seng vs. Media and Games | Keck Seng vs. American Public Education |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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