Correlation Between Keck Seng and Electronic Arts

Can any of the company-specific risk be diversified away by investing in both Keck Seng and Electronic Arts 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 Keck Seng and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Keck Seng Investments and Electronic Arts, you can compare the effects of market volatilities on Keck Seng and Electronic Arts 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 Keck Seng with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Electronic Arts.

Diversification Opportunities for Keck Seng and Electronic Arts

-0.21

Correlation Coefficient

Keck Seng  Electronic Arts

Very good diversification

The 3 months correlation between Keck and Electronic is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Keck Seng 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 Keck Seng Investments are associated (or correlated) with Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Keck Seng i.e., Keck Seng and Electronic Arts go up and down completely randomly.

Pair Corralation between Keck Seng and Electronic Arts

Assuming the 90 days horizon Keck Seng Investments is expected to generate 6.0 times more return on investment than Electronic Arts. However, Keck Seng is 6.0 times more volatile than Electronic Arts. It trades about 0.17 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.11 per unit of risk. If you would invest  23.00  in Keck Seng Investments on April 22, 2025 and sell it today you would earn a total of  4.00  from holding Keck Seng Investments or generate 17.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Keck Seng Investments  vs.  Electronic Arts

Keck Seng Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keck Seng Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Keck Seng reported solid returns over the last few months and may actually be approaching a breakup point.

Electronic Arts

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electronic Arts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Electronic Arts is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Keck Seng and Electronic Arts

The main advantage of trading using opposite Keck Seng and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.

The idea behind Keck Seng Investments and Electronic Arts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.