Correlation Between Keppel and Shanghai Industrial
Can any of the company-specific risk be diversified away by investing in both Keppel and Shanghai Industrial 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 and Shanghai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keppel Limited and Shanghai Industrial Holdings, you can compare the effects of market volatilities on Keppel and Shanghai Industrial 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 with a short position of Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keppel and Shanghai Industrial.
Diversification Opportunities for Keppel and Shanghai Industrial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Keppel and Shanghai is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Keppel Limited and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial and Keppel 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 Shanghai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Industrial has no effect on the direction of Keppel i.e., Keppel and Shanghai Industrial go up and down completely randomly.
Pair Corralation between Keppel and Shanghai Industrial
If you would invest 1,000.00 in Keppel Limited on September 20, 2024 and sell it today you would earn a total of 16.00 from holding Keppel Limited or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Keppel Limited vs. Shanghai Industrial Holdings
Performance |
| Timeline |
| Keppel Limited |
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Keppel and Shanghai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keppel and Shanghai Industrial
The main advantage of trading using opposite Keppel and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keppel position performs unexpectedly, Shanghai Industrial 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 Shanghai Industrial will offset losses from the drop in Shanghai Industrial's long position.| Keppel vs. Arca Continental SAB | Keppel vs. Becle SA de | Keppel vs. Aquagold International | Keppel vs. Morningstar Unconstrained Allocation |
| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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