Correlation Between Kang Yong and KGI Securities
Can any of the company-specific risk be diversified away by investing in both Kang Yong and KGI Securities 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 Kang Yong and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kang Yong Electric and KGI Securities Public, you can compare the effects of market volatilities on Kang Yong and KGI Securities 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 Kang Yong with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kang Yong and KGI Securities.
Diversification Opportunities for Kang Yong and KGI Securities
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kang and KGI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kang Yong Electric and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and Kang Yong 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 Kang Yong Electric are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of Kang Yong i.e., Kang Yong and KGI Securities go up and down completely randomly.
Pair Corralation between Kang Yong and KGI Securities
Assuming the 90 days trading horizon Kang Yong Electric is expected to generate 0.58 times more return on investment than KGI Securities. However, Kang Yong Electric is 1.74 times less risky than KGI Securities. It trades about -0.14 of its potential returns per unit of risk. KGI Securities Public is currently generating about -0.3 per unit of risk. If you would invest 29,200 in Kang Yong Electric on August 29, 2024 and sell it today you would lose (300.00) from holding Kang Yong Electric or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kang Yong Electric vs. KGI Securities Public
Performance |
| Timeline |
| Kang Yong Electric |
| KGI Securities Public |
Kang Yong and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kang Yong and KGI Securities
The main advantage of trading using opposite Kang Yong and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kang Yong position performs unexpectedly, KGI Securities 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 KGI Securities will offset losses from the drop in KGI Securities' long position.| Kang Yong vs. SCB X Public | Kang Yong vs. Kasikornbank Public | Kang Yong vs. PTT Public | Kang Yong vs. Kasikornbank Public |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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