Correlation Between KEPPEL CORP and WIZZ AIR
Can any of the company-specific risk be diversified away by investing in both KEPPEL CORP and WIZZ AIR 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 KEPPEL CORP and WIZZ AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEPPEL P and WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on KEPPEL CORP and WIZZ AIR 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 KEPPEL CORP with a short position of WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPPEL CORP and WIZZ AIR.
Diversification Opportunities for KEPPEL CORP and WIZZ AIR
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KEPPEL and WIZZ is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KEPPEL P and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 and KEPPEL CORP 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 KEPPEL P are associated (or correlated) with WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of KEPPEL CORP i.e., KEPPEL CORP and WIZZ AIR go up and down completely randomly.
Pair Corralation between KEPPEL CORP and WIZZ AIR
Assuming the 90 days trading horizon KEPPEL P is expected to generate 0.27 times more return on investment than WIZZ AIR. However, KEPPEL P is 3.72 times less risky than WIZZ AIR. It trades about 0.22 of its potential returns per unit of risk. WIZZ AIR HLDGUNSPADR4 is currently generating about 0.01 per unit of risk. If you would invest 413.00 in KEPPEL P on August 28, 2024 and sell it today you would earn a total of 57.00 from holding KEPPEL P or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPPEL P vs. WIZZ AIR HLDGUNSPADR4
Performance |
| Timeline |
| KEPPEL CORP |
| WIZZ AIR HLDGUNSPADR4 |
KEPPEL CORP and WIZZ AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPPEL CORP and WIZZ AIR
The main advantage of trading using opposite KEPPEL CORP and WIZZ AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPPEL CORP position performs unexpectedly, WIZZ AIR 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 WIZZ AIR will offset losses from the drop in WIZZ AIR's long position.| KEPPEL CORP vs. GigaMedia | KEPPEL CORP vs. Ubisoft Entertainment SA | KEPPEL CORP vs. PT Global Mediacom | KEPPEL CORP vs. Universal Entertainment |
| WIZZ AIR vs. United Utilities Group | WIZZ AIR vs. NORTHEAST UTILITIES | WIZZ AIR vs. PT Indofood Sukses | WIZZ AIR vs. RYU Apparel |
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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