Correlation Between Teijin and Keppel
Can any of the company-specific risk be diversified away by investing in both Teijin and Keppel 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 Teijin and Keppel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teijin and Keppel Limited, you can compare the effects of market volatilities on Teijin and Keppel 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 Teijin with a short position of Keppel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teijin and Keppel.
Diversification Opportunities for Teijin and Keppel
Very weak diversification
The 3 months correlation between Teijin and Keppel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Teijin and Keppel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keppel Limited and Teijin 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 Teijin are associated (or correlated) with Keppel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keppel Limited has no effect on the direction of Teijin i.e., Teijin and Keppel go up and down completely randomly.
Pair Corralation between Teijin and Keppel
Assuming the 90 days horizon Teijin is expected to under-perform the Keppel. In addition to that, Teijin is 1.13 times more volatile than Keppel Limited. It trades about -0.01 of its total potential returns per unit of risk. Keppel Limited is currently generating about 0.03 per unit of volatility. If you would invest 823.00 in Keppel Limited on September 19, 2024 and sell it today you would earn a total of 193.00 from holding Keppel Limited or generate 23.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.16% |
| Values | Daily Returns |
Teijin vs. Keppel Limited
Performance |
| Timeline |
| Teijin |
| Keppel Limited |
Teijin and Keppel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teijin and Keppel
The main advantage of trading using opposite Teijin and Keppel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teijin position performs unexpectedly, Keppel 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 Keppel will offset losses from the drop in Keppel's long position.| Teijin vs. Arca Continental SAB | Teijin vs. Becle SA de | Teijin vs. Aquagold International | Teijin vs. Morningstar Unconstrained Allocation |
| Keppel vs. Arca Continental SAB | Keppel vs. Becle SA de | Keppel vs. Aquagold International | Keppel vs. Morningstar Unconstrained Allocation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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