Correlation Between KCE Electronics and Cal Comp
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Cal Comp 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 Cal Comp 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 Cal Comp Electronics Public, you can compare the effects of market volatilities on KCE Electronics and Cal Comp 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 Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Cal Comp.
Diversification Opportunities for KCE Electronics and Cal Comp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between KCE and Cal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Cal Comp Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Comp Electronics 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 Cal Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Comp Electronics has no effect on the direction of KCE Electronics i.e., KCE Electronics and Cal Comp go up and down completely randomly.
Pair Corralation between KCE Electronics and Cal Comp
Assuming the 90 days trading horizon KCE Electronics Public is expected to generate 0.69 times more return on investment than Cal Comp. However, KCE Electronics Public is 1.45 times less risky than Cal Comp. It trades about -0.15 of its potential returns per unit of risk. Cal Comp Electronics Public is currently generating about -0.23 per unit of risk. If you would invest 2,250 in KCE Electronics Public on November 27, 2024 and sell it today you would lose (190.00) from holding KCE Electronics Public or give up 8.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. Cal Comp Electronics Public
Performance |
| Timeline |
| KCE Electronics Public |
| Cal Comp Electronics |
KCE Electronics and Cal Comp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Cal Comp
The main advantage of trading using opposite KCE Electronics and Cal Comp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Cal Comp 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 Cal Comp will offset losses from the drop in Cal Comp'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 |
| Cal Comp vs. Hana Microelectronics Public | Cal Comp vs. KCE Electronics Public | Cal Comp vs. Dynasty Ceramic Public | Cal Comp vs. Delta Electronics Public |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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