Correlation Between KCE Electronics and Mega Lifesciences
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences Public, you can compare the effects of market volatilities on KCE Electronics and Mega Lifesciences 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 Mega Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Mega Lifesciences.
Diversification Opportunities for KCE Electronics and Mega Lifesciences
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KCE and Mega is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Mega Lifesciences Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Lifesciences 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 Mega Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Lifesciences Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Mega Lifesciences go up and down completely randomly.
Pair Corralation between KCE Electronics and Mega Lifesciences
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Mega Lifesciences. In addition to that, KCE Electronics is 1.68 times more volatile than Mega Lifesciences Public. It trades about -0.52 of its total potential returns per unit of risk. Mega Lifesciences Public is currently generating about -0.28 per unit of volatility. If you would invest 3,950 in Mega Lifesciences Public on September 1, 2024 and sell it today you would lose (425.00) from holding Mega Lifesciences Public or give up 10.76% 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. Mega Lifesciences Public
Performance |
| Timeline |
| KCE Electronics Public |
| Mega Lifesciences Public |
KCE Electronics and Mega Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Mega Lifesciences
The main advantage of trading using opposite KCE Electronics and Mega Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Mega Lifesciences 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 Mega Lifesciences will offset losses from the drop in Mega Lifesciences' 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 |
| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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