Correlation Between Pacific Pipe and KGI Securities
Can any of the company-specific risk be diversified away by investing in both Pacific Pipe 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 Pacific Pipe and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Pipe Public and KGI Securities Public, you can compare the effects of market volatilities on Pacific Pipe 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 Pacific Pipe with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Pipe and KGI Securities.
Diversification Opportunities for Pacific Pipe and KGI Securities
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pacific and KGI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Pipe 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 Pacific Pipe 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 Pacific Pipe 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 Pacific Pipe i.e., Pacific Pipe and KGI Securities go up and down completely randomly.
Pair Corralation between Pacific Pipe and KGI Securities
Assuming the 90 days trading horizon Pacific Pipe Public is expected to under-perform the KGI Securities. In addition to that, Pacific Pipe is 2.86 times more volatile than KGI Securities Public. It trades about -0.05 of its total potential returns per unit of risk. KGI Securities Public is currently generating about 0.0 per unit of volatility. If you would invest 421.00 in KGI Securities Public on August 30, 2024 and sell it today you would lose (1.00) from holding KGI Securities Public or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Pipe Public vs. KGI Securities Public
Performance |
| Timeline |
| Pacific Pipe Public |
| KGI Securities Public |
Pacific Pipe and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Pipe and KGI Securities
The main advantage of trading using opposite Pacific Pipe and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Pipe 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.| Pacific Pipe vs. 2S Metal Public | Pacific Pipe vs. AAPICO Hitech Public | Pacific Pipe vs. AJ Plast Public |
| KGI Securities vs. AAPICO Hitech Public | KGI Securities vs. Namwiwat Medical | KGI Securities vs. Heng Leasing Capital | KGI Securities vs. INET Leasehold REIT |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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