Correlation Between Modernform Group and KGI Securities
Can any of the company-specific risk be diversified away by investing in both Modernform Group 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 Modernform Group and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modernform Group Public and KGI Securities Public, you can compare the effects of market volatilities on Modernform Group 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 Modernform Group with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modernform Group and KGI Securities.
Diversification Opportunities for Modernform Group and KGI Securities
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Modernform and KGI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Modernform Group Public 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 Modernform Group 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 Modernform Group Public 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 Modernform Group i.e., Modernform Group and KGI Securities go up and down completely randomly.
Pair Corralation between Modernform Group and KGI Securities
Assuming the 90 days trading horizon Modernform Group Public is expected to generate 83.33 times more return on investment than KGI Securities. However, Modernform Group is 83.33 times more volatile than KGI Securities Public. It trades about 0.08 of its potential returns per unit of risk. KGI Securities Public is currently generating about -0.04 per unit of risk. If you would invest 224.00 in Modernform Group Public on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Modernform Group Public or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modernform Group Public vs. KGI Securities Public
Performance |
| Timeline |
| Modernform Group Public |
| KGI Securities Public |
Modernform Group and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modernform Group and KGI Securities
The main advantage of trading using opposite Modernform Group and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modernform Group 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.| Modernform Group vs. KGI Securities Public | Modernform Group vs. Hana Microelectronics Public | Modernform Group vs. LPN Development Public | Modernform Group vs. MFEC PCL |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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