Correlation Between Keck Seng and SIERRA METALS
Can any of the company-specific risk be diversified away by investing in both Keck Seng and SIERRA METALS 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 Keck Seng and SIERRA METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Investments and SIERRA METALS, you can compare the effects of market volatilities on Keck Seng and SIERRA METALS 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 Keck Seng with a short position of SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and SIERRA METALS.
Diversification Opportunities for Keck Seng and SIERRA METALS
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keck and SIERRA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS and Keck Seng 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 Keck Seng Investments are associated (or correlated) with SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of Keck Seng i.e., Keck Seng and SIERRA METALS go up and down completely randomly.
Pair Corralation between Keck Seng and SIERRA METALS
Assuming the 90 days horizon Keck Seng Investments is expected to generate 2.11 times more return on investment than SIERRA METALS. However, Keck Seng is 2.11 times more volatile than SIERRA METALS. It trades about 0.12 of its potential returns per unit of risk. SIERRA METALS is currently generating about 0.19 per unit of risk. If you would invest 24.00 in Keck Seng Investments on October 28, 2024 and sell it today you would earn a total of 2.00 from holding Keck Seng Investments or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. SIERRA METALS
Performance |
| Timeline |
| Keck Seng Investments |
| SIERRA METALS |
Keck Seng and SIERRA METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and SIERRA METALS
The main advantage of trading using opposite Keck Seng and SIERRA METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, SIERRA METALS 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 SIERRA METALS will offset losses from the drop in SIERRA METALS's long position.| Keck Seng vs. ASURE SOFTWARE | Keck Seng vs. Urban Outfitters | Keck Seng vs. JAPAN TOBACCO UNSPADR12 | Keck Seng vs. Japan Tobacco |
| SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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