Correlation Between KCE Electronics and Exotic Food
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Exotic Food 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 Exotic Food 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 Exotic Food Public, you can compare the effects of market volatilities on KCE Electronics and Exotic Food 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 Exotic Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Exotic Food.
Diversification Opportunities for KCE Electronics and Exotic Food
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KCE and Exotic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Exotic Food Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exotic Food 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 Exotic Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exotic Food Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Exotic Food go up and down completely randomly.
Pair Corralation between KCE Electronics and Exotic Food
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Exotic Food. But the stock apears to be less risky and, when comparing its historical volatility, KCE Electronics Public is 1.39 times less risky than Exotic Food. The stock trades about -0.08 of its potential returns per unit of risk. The Exotic Food Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Exotic Food Public on August 29, 2024 and sell it today you would lose (720.00) from holding Exotic Food Public or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. Exotic Food Public
Performance |
| Timeline |
| KCE Electronics Public |
| Exotic Food Public |
KCE Electronics and Exotic Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Exotic Food
The main advantage of trading using opposite KCE Electronics and Exotic Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Exotic Food 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 Exotic Food will offset losses from the drop in Exotic Food's long position.| KCE Electronics vs. AP Public | KCE Electronics vs. Jasmine International Public | KCE Electronics vs. Asia Plus Group | KCE Electronics vs. Bangchak Public |
| Exotic Food vs. Carabao Group Public | Exotic Food vs. Jay Mart Public | Exotic Food vs. Gulf Energy Development | Exotic Food vs. KCE 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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