Correlation Between KCE Electronics and Land
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Land 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 Land 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 Land and Houses, you can compare the effects of market volatilities on KCE Electronics and Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Land.
Diversification Opportunities for KCE Electronics and Land
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KCE and Land is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of KCE Electronics i.e., KCE Electronics and Land go up and down completely randomly.
Pair Corralation between KCE Electronics and Land
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Land. But the stock apears to be less risky and, when comparing its historical volatility, KCE Electronics Public is 31.83 times less risky than Land. The stock trades about -0.1 of its potential returns per unit of risk. The Land and Houses is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 734.00 in Land and Houses on August 28, 2024 and sell it today you would lose (174.00) from holding Land and Houses or give up 23.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. Land and Houses
Performance |
| Timeline |
| KCE Electronics Public |
| Land and Houses |
KCE Electronics and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Land
The main advantage of trading using opposite KCE Electronics and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Land 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 Land will offset losses from the drop in Land'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 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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