Correlation Between Humanica Public and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Humanica Public and KCE Electronics 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 Humanica Public and KCE Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humanica Public and KCE Electronics Public, you can compare the effects of market volatilities on Humanica Public and KCE Electronics 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 Humanica Public with a short position of KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humanica Public and KCE Electronics.
Diversification Opportunities for Humanica Public and KCE Electronics
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Humanica and KCE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Humanica Public and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public and Humanica Public 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 Humanica Public are associated (or correlated) with KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of Humanica Public i.e., Humanica Public and KCE Electronics go up and down completely randomly.
Pair Corralation between Humanica Public and KCE Electronics
Assuming the 90 days trading horizon Humanica Public is expected to generate 0.87 times more return on investment than KCE Electronics. However, Humanica Public is 1.15 times less risky than KCE Electronics. It trades about 0.0 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.04 per unit of risk. If you would invest 1,053 in Humanica Public on September 12, 2024 and sell it today you would lose (143.00) from holding Humanica Public or give up 13.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humanica Public vs. KCE Electronics Public
Performance |
| Timeline |
| Humanica Public |
| KCE Electronics Public |
Humanica Public and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humanica Public and KCE Electronics
The main advantage of trading using opposite Humanica Public and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humanica Public position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' long position.| Humanica Public vs. Home Product Center | Humanica Public vs. Hana Microelectronics Public | Humanica Public vs. Gulf Energy Development | Humanica Public vs. Forth Public |
| KCE Electronics vs. Hana Microelectronics Public | KCE Electronics vs. Kasikornbank Public | KCE Electronics vs. Land and Houses | KCE Electronics vs. Indorama Ventures PCL |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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