Correlation Between KCE Electronics and Sonic Interfreight
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Sonic Interfreight 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 Sonic Interfreight 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 Sonic Interfreight Public, you can compare the effects of market volatilities on KCE Electronics and Sonic Interfreight 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 Sonic Interfreight. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Sonic Interfreight.
Diversification Opportunities for KCE Electronics and Sonic Interfreight
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KCE and Sonic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Sonic Interfreight Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Interfreight 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 Sonic Interfreight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Interfreight Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Sonic Interfreight go up and down completely randomly.
Pair Corralation between KCE Electronics and Sonic Interfreight
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Sonic Interfreight. In addition to that, KCE Electronics is 1.81 times more volatile than Sonic Interfreight Public. It trades about -0.17 of its total potential returns per unit of risk. Sonic Interfreight Public is currently generating about -0.13 per unit of volatility. If you would invest 163.00 in Sonic Interfreight Public on November 29, 2024 and sell it today you would lose (7.00) from holding Sonic Interfreight Public or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
KCE Electronics Public vs. Sonic Interfreight Public
Performance |
| Timeline |
| KCE Electronics Public |
| Sonic Interfreight Public |
KCE Electronics and Sonic Interfreight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Sonic Interfreight
The main advantage of trading using opposite KCE Electronics and Sonic Interfreight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Sonic Interfreight 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 Sonic Interfreight will offset losses from the drop in Sonic Interfreight'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 |
| Sonic Interfreight vs. North East Rubbers | Sonic Interfreight vs. KCE Electronics Public | Sonic Interfreight vs. AP Public | Sonic Interfreight vs. S P V |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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