Correlation Between Keck Seng and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Keck Seng and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on Keck Seng and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and IMPERIAL TOBACCO.
Diversification Opportunities for Keck Seng and IMPERIAL TOBACCO
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keck and IMPERIAL is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Keck Seng i.e., Keck Seng and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Keck Seng and IMPERIAL TOBACCO
Assuming the 90 days horizon Keck Seng Investments is expected to generate 3.49 times more return on investment than IMPERIAL TOBACCO. However, Keck Seng is 3.49 times more volatile than IMPERIAL TOBACCO . It trades about 0.09 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about -0.03 per unit of risk. If you would invest 22.00 in Keck Seng Investments on April 24, 2025 and sell it today you would earn a total of 5.00 from holding Keck Seng Investments or generate 22.73% 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. IMPERIAL TOBACCO
Performance |
Timeline |
Keck Seng Investments |
IMPERIAL TOBACCO |
Keck Seng and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Keck Seng and IMPERIAL TOBACCO
The main advantage of trading using opposite Keck Seng and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.Keck Seng vs. DOCDATA | Keck Seng vs. Cass Information Systems | Keck Seng vs. Computer And Technologies | Keck Seng vs. DATATEC LTD 2 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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