Correlation Between KCE Electronics and AP Public
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and AP Public 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 AP Public 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 AP Public, you can compare the effects of market volatilities on KCE Electronics and AP Public 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 AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and AP Public.
Diversification Opportunities for KCE Electronics and AP Public
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KCE and AP Public is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP 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 AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and AP Public go up and down completely randomly.
Pair Corralation between KCE Electronics and AP Public
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the AP Public. In addition to that, KCE Electronics is 1.36 times more volatile than AP Public. It trades about -0.1 of its total potential returns per unit of risk. AP Public is currently generating about -0.03 per unit of volatility. If you would invest 1,028 in AP Public on August 25, 2024 and sell it today you would lose (143.00) from holding AP Public or give up 13.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. AP Public
Performance |
| Timeline |
| KCE Electronics Public |
| AP Public |
KCE Electronics and AP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and AP Public
The main advantage of trading using opposite KCE Electronics and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.| KCE Electronics vs. AP Public | KCE Electronics vs. Jasmine International Public | KCE Electronics vs. Asia Plus Group | KCE Electronics vs. Bangkok Aviation Fuel |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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