Correlation Between SCG Packaging and Kingsmen CMTI
Can any of the company-specific risk be diversified away by investing in both SCG Packaging and Kingsmen CMTI 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 SCG Packaging and Kingsmen CMTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Packaging Public and Kingsmen CMTI Public, you can compare the effects of market volatilities on SCG Packaging and Kingsmen CMTI 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 SCG Packaging with a short position of Kingsmen CMTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Packaging and Kingsmen CMTI.
Diversification Opportunities for SCG Packaging and Kingsmen CMTI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCG and Kingsmen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SCG Packaging Public and Kingsmen CMTI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen CMTI Public and SCG Packaging 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 SCG Packaging Public are associated (or correlated) with Kingsmen CMTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen CMTI Public has no effect on the direction of SCG Packaging i.e., SCG Packaging and Kingsmen CMTI go up and down completely randomly.
Pair Corralation between SCG Packaging and Kingsmen CMTI
Assuming the 90 days trading horizon SCG Packaging is expected to generate 1.11 times less return on investment than Kingsmen CMTI. But when comparing it to its historical volatility, SCG Packaging Public is 1.0 times less risky than Kingsmen CMTI. It trades about 0.08 of its potential returns per unit of risk. Kingsmen CMTI Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Kingsmen CMTI Public on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Kingsmen CMTI Public or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
SCG Packaging Public vs. Kingsmen CMTI Public
Performance |
| Timeline |
| SCG Packaging Public |
| Kingsmen CMTI Public |
SCG Packaging and Kingsmen CMTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Packaging and Kingsmen CMTI
The main advantage of trading using opposite SCG Packaging and Kingsmen CMTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Packaging position performs unexpectedly, Kingsmen CMTI 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 Kingsmen CMTI will offset losses from the drop in Kingsmen CMTI's long position.| SCG Packaging vs. Kingsmen CMTI Public | SCG Packaging vs. Project Planning Service | SCG Packaging vs. Power Solution Technologies | SCG Packaging vs. Hydrotek Public |
| Kingsmen CMTI vs. Com7 PCL | Kingsmen CMTI vs. SKijchai Enterprise Public | Kingsmen CMTI vs. TKS Technologies Public | Kingsmen CMTI vs. Rajthanee Hospital Public |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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