Correlation Between President Automobile and KGI Securities
Can any of the company-specific risk be diversified away by investing in both President Automobile 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 President Automobile and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Automobile Industries and KGI Securities Public, you can compare the effects of market volatilities on President Automobile 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 President Automobile with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Automobile and KGI Securities.
Diversification Opportunities for President Automobile and KGI Securities
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between President and KGI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding President Automobile Industrie 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 President Automobile 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 President Automobile Industries 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 President Automobile i.e., President Automobile and KGI Securities go up and down completely randomly.
Pair Corralation between President Automobile and KGI Securities
Assuming the 90 days trading horizon President Automobile Industries is expected to generate 1.97 times more return on investment than KGI Securities. However, President Automobile is 1.97 times more volatile than KGI Securities Public. It trades about 0.28 of its potential returns per unit of risk. KGI Securities Public is currently generating about 0.1 per unit of risk. If you would invest 133.00 in President Automobile Industries on December 1, 2024 and sell it today you would earn a total of 11.00 from holding President Automobile Industries or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Automobile Industrie vs. KGI Securities Public
Performance |
| Timeline |
| President Automobile |
| KGI Securities Public |
President Automobile and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Automobile and KGI Securities
The main advantage of trading using opposite President Automobile and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Automobile 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.| President Automobile vs. Phol Dhanya Public | President Automobile vs. PTT Oil and | President Automobile vs. Pico Public | President Automobile vs. Pioneer Motor 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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