Correlation Between KeppelLimited and Alliance Recovery
Can any of the company-specific risk be diversified away by investing in both KeppelLimited and Alliance Recovery 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 KeppelLimited and Alliance Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keppel Limited and Alliance Recovery, you can compare the effects of market volatilities on KeppelLimited and Alliance Recovery 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 KeppelLimited with a short position of Alliance Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeppelLimited and Alliance Recovery.
Diversification Opportunities for KeppelLimited and Alliance Recovery
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KeppelLimited and Alliance is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Keppel Limited and Alliance Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Recovery and KeppelLimited 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 Limited are associated (or correlated) with Alliance Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Recovery has no effect on the direction of KeppelLimited i.e., KeppelLimited and Alliance Recovery go up and down completely randomly.
Pair Corralation between KeppelLimited and Alliance Recovery
Assuming the 90 days horizon Keppel Limited is expected to generate 0.71 times more return on investment than Alliance Recovery. However, Keppel Limited is 1.41 times less risky than Alliance Recovery. It trades about 0.04 of its potential returns per unit of risk. Alliance Recovery is currently generating about -0.02 per unit of risk. If you would invest 634.00 in Keppel Limited on November 2, 2024 and sell it today you would earn a total of 366.00 from holding Keppel Limited or generate 57.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.99% |
| Values | Daily Returns |
Keppel Limited vs. Alliance Recovery
Performance |
| Timeline |
| Keppel Limited |
| Alliance Recovery |
KeppelLimited and Alliance Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeppelLimited and Alliance Recovery
The main advantage of trading using opposite KeppelLimited and Alliance Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeppelLimited position performs unexpectedly, Alliance Recovery 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 Alliance Recovery will offset losses from the drop in Alliance Recovery's long position.| KeppelLimited vs. Singapore Telecommunications PK | KeppelLimited vs. United Overseas Bank | KeppelLimited vs. DBS Group Holdings | KeppelLimited vs. Power Assets Holdings |
| Alliance Recovery vs. Oatly Group AB | Alliance Recovery vs. Primo Brands | Alliance Recovery vs. Crimson Wine | Alliance Recovery vs. The Coca Cola |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |