Correlation Between KCE Electronics and Dynasty Ceramic
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Dynasty Ceramic 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 Dynasty Ceramic 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 Dynasty Ceramic Public, you can compare the effects of market volatilities on KCE Electronics and Dynasty Ceramic 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 Dynasty Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Dynasty Ceramic.
Diversification Opportunities for KCE Electronics and Dynasty Ceramic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KCE and Dynasty is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Dynasty Ceramic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasty Ceramic 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 Dynasty Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasty Ceramic Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Dynasty Ceramic go up and down completely randomly.
Pair Corralation between KCE Electronics and Dynasty Ceramic
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Dynasty Ceramic. In addition to that, KCE Electronics is 1.24 times more volatile than Dynasty Ceramic Public. It trades about -0.13 of its total potential returns per unit of risk. Dynasty Ceramic Public is currently generating about 0.06 per unit of volatility. If you would invest 148.00 in Dynasty Ceramic Public on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Dynasty Ceramic Public or generate 26.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
KCE Electronics Public vs. Dynasty Ceramic Public
Performance |
| Timeline |
| KCE Electronics Public |
| Dynasty Ceramic Public |
KCE Electronics and Dynasty Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Dynasty Ceramic
The main advantage of trading using opposite KCE Electronics and Dynasty Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Dynasty Ceramic 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 Dynasty Ceramic will offset losses from the drop in Dynasty Ceramic'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 |
| Dynasty Ceramic vs. Land and Houses | Dynasty Ceramic vs. AP Public | Dynasty Ceramic vs. Charoen Pokphand Foods | Dynasty Ceramic vs. Hana Microelectronics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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