Correlation Between Keck Seng and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Keck Seng and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on Keck Seng and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and China BlueChemical.
Diversification Opportunities for Keck Seng and China BlueChemical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Keck and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Keck Seng i.e., Keck Seng and China BlueChemical go up and down completely randomly.
Pair Corralation between Keck Seng and China BlueChemical
Assuming the 90 days horizon Keck Seng Investments is expected to generate 1.53 times more return on investment than China BlueChemical. However, Keck Seng is 1.53 times more volatile than China BlueChemical. It trades about 0.06 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.03 per unit of risk. If you would invest 13.00 in Keck Seng Investments on October 13, 2024 and sell it today you would earn a total of 15.00 from holding Keck Seng Investments or generate 115.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. China BlueChemical
Performance |
| Timeline |
| Keck Seng Investments |
| China BlueChemical |
Keck Seng and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and China BlueChemical
The main advantage of trading using opposite Keck Seng and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical's long position.| Keck Seng vs. Marriott International | Keck Seng vs. Hyatt Hotels | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. INTERCONT HOTELS |
| China BlueChemical vs. Keck Seng Investments | China BlueChemical vs. WisdomTree Investments | China BlueChemical vs. FORMPIPE SOFTWARE AB | China BlueChemical vs. SLR Investment Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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