Correlation Between Team Precision and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Team Precision and KCE Electronics 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 Team Precision and KCE Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Precision Public and KCE Electronics Public, you can compare the effects of market volatilities on Team Precision and KCE Electronics 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 Team Precision with a short position of KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team Precision and KCE Electronics.
Diversification Opportunities for Team Precision and KCE Electronics
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Team and KCE is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Team Precision Public and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public and Team Precision 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 Team Precision Public are associated (or correlated) with KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of Team Precision i.e., Team Precision and KCE Electronics go up and down completely randomly.
Pair Corralation between Team Precision and KCE Electronics
Assuming the 90 days trading horizon Team Precision Public is expected to generate 1.55 times more return on investment than KCE Electronics. However, Team Precision is 1.55 times more volatile than KCE Electronics Public. It trades about -0.38 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.61 per unit of risk. If you would invest 370.00 in Team Precision Public on September 12, 2024 and sell it today you would lose (96.00) from holding Team Precision Public or give up 25.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Team Precision Public vs. KCE Electronics Public
Performance |
| Timeline |
| Team Precision Public |
| KCE Electronics Public |
Team Precision and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Team Precision and KCE Electronics
The main advantage of trading using opposite Team Precision and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team Precision position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' long position.| Team Precision vs. KCE Electronics Public | Team Precision vs. Land and Houses | Team Precision vs. Delta Electronics Public | Team Precision vs. The Siam Cement |
| KCE Electronics vs. Hana Microelectronics Public | KCE Electronics vs. Kasikornbank Public | KCE Electronics vs. Land and Houses | KCE Electronics vs. Indorama Ventures PCL |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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