Correlation Between KCE Electronics and Ditto Public
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Ditto 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 Ditto 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 Ditto Public, you can compare the effects of market volatilities on KCE Electronics and Ditto 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 Ditto Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Ditto Public.
Diversification Opportunities for KCE Electronics and Ditto Public
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KCE and Ditto is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Ditto Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ditto 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 Ditto Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ditto Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Ditto Public go up and down completely randomly.
Pair Corralation between KCE Electronics and Ditto Public
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Ditto Public. But the stock apears to be less risky and, when comparing its historical volatility, KCE Electronics Public is 1.55 times less risky than Ditto Public. The stock trades about -0.13 of its potential returns per unit of risk. The Ditto Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,374 in Ditto Public on September 1, 2024 and sell it today you would lose (754.00) from holding Ditto Public or give up 31.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
KCE Electronics Public vs. Ditto Public
Performance |
| Timeline |
| KCE Electronics Public |
| Ditto Public |
KCE Electronics and Ditto Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Ditto Public
The main advantage of trading using opposite KCE Electronics and Ditto Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Ditto 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 Ditto Public will offset losses from the drop in Ditto Public'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 |
| Ditto Public vs. Dohome Public | Ditto Public vs. Beryl 8 Plus | Ditto Public vs. Forth Public | Ditto Public 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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