Correlation Between KCE Electronics and Forth Public
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Forth 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 Forth 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 Forth Public, you can compare the effects of market volatilities on KCE Electronics and Forth 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 Forth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Forth Public.
Diversification Opportunities for KCE Electronics and Forth Public
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KCE and Forth is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Forth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forth 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 Forth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forth Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Forth Public go up and down completely randomly.
Pair Corralation between KCE Electronics and Forth Public
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Forth Public. But the stock apears to be less risky and, when comparing its historical volatility, KCE Electronics Public is 1.63 times less risky than Forth Public. The stock trades about -0.14 of its potential returns per unit of risk. The Forth Public is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,946 in Forth Public on September 12, 2024 and sell it today you would lose (846.00) from holding Forth Public or give up 43.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. Forth Public
Performance |
| Timeline |
| KCE Electronics Public |
| Forth Public |
KCE Electronics and Forth Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Forth Public
The main advantage of trading using opposite KCE Electronics and Forth Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Forth 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 Forth Public will offset losses from the drop in Forth 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 |
| Forth Public vs. PTT Global Chemical | Forth Public vs. Dohome Public | Forth Public vs. The Navakij Insurance | Forth Public vs. Pato Chemical Industry |
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 Stocks Directory module to find actively traded stocks across global markets.
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