Correlation Between KCE Electronics and ALT Telecom
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and ALT Telecom 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 KCE Electronics and ALT Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCE Electronics Public and ALT Telecom Public, you can compare the effects of market volatilities on KCE Electronics and ALT Telecom 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 KCE Electronics with a short position of ALT Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and ALT Telecom.
Diversification Opportunities for KCE Electronics and ALT Telecom
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KCE and ALT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and ALT Telecom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALT Telecom Public and KCE Electronics 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 KCE Electronics Public are associated (or correlated) with ALT Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALT Telecom Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and ALT Telecom go up and down completely randomly.
Pair Corralation between KCE Electronics and ALT Telecom
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the ALT Telecom. In addition to that, KCE Electronics is 1.66 times more volatile than ALT Telecom Public. It trades about -0.61 of its total potential returns per unit of risk. ALT Telecom Public is currently generating about 0.01 per unit of volatility. If you would invest 110.00 in ALT Telecom Public on September 12, 2024 and sell it today you would earn a total of 0.00 from holding ALT Telecom Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. ALT Telecom Public
Performance |
| Timeline |
| KCE Electronics Public |
| ALT Telecom Public |
KCE Electronics and ALT Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and ALT Telecom
The main advantage of trading using opposite KCE Electronics and ALT Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, ALT Telecom 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 ALT Telecom will offset losses from the drop in ALT Telecom's long position.| KCE Electronics vs. Hana Microelectronics Public | KCE Electronics vs. Kasikornbank Public | KCE Electronics vs. Land and Houses | KCE Electronics vs. Indorama Ventures PCL |
| ALT Telecom vs. KCE Electronics Public | ALT Telecom vs. Land and Houses | ALT Telecom vs. Delta Electronics Public | ALT Telecom vs. The Siam Cement |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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