Correlation Between KC Metalsheet and Chin Huay
Can any of the company-specific risk be diversified away by investing in both KC Metalsheet and Chin Huay 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 KC Metalsheet and Chin Huay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KC Metalsheet Public and Chin Huay PCL, you can compare the effects of market volatilities on KC Metalsheet and Chin Huay 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 KC Metalsheet with a short position of Chin Huay. Check out your portfolio center. Please also check ongoing floating volatility patterns of KC Metalsheet and Chin Huay.
Diversification Opportunities for KC Metalsheet and Chin Huay
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between KCM and Chin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KC Metalsheet Public and Chin Huay PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Huay PCL and KC Metalsheet 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 KC Metalsheet Public are associated (or correlated) with Chin Huay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Huay PCL has no effect on the direction of KC Metalsheet i.e., KC Metalsheet and Chin Huay go up and down completely randomly.
Pair Corralation between KC Metalsheet and Chin Huay
Assuming the 90 days trading horizon KC Metalsheet Public is expected to generate 1.14 times more return on investment than Chin Huay. However, KC Metalsheet is 1.14 times more volatile than Chin Huay PCL. It trades about -0.25 of its potential returns per unit of risk. Chin Huay PCL is currently generating about -0.34 per unit of risk. If you would invest 34.00 in KC Metalsheet Public on September 5, 2024 and sell it today you would lose (4.00) from holding KC Metalsheet Public or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KC Metalsheet Public vs. Chin Huay PCL
Performance |
| Timeline |
| KC Metalsheet Public |
| Chin Huay PCL |
KC Metalsheet and Chin Huay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KC Metalsheet and Chin Huay
The main advantage of trading using opposite KC Metalsheet and Chin Huay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KC Metalsheet position performs unexpectedly, Chin Huay 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 Chin Huay will offset losses from the drop in Chin Huay's long position.| KC Metalsheet vs. Chewathai Public | KC Metalsheet vs. AIRA Factoring Public | KC Metalsheet vs. Cho Thavee Public | KC Metalsheet vs. G Capital Public |
| Chin Huay vs. Kingsmen CMTI Public | Chin Huay vs. Hydrotek Public | Chin Huay vs. Karmarts Public | Chin Huay vs. KC Metalsheet 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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