Correlation Between KGI Securities and MCS Steel

Can any of the company-specific risk be diversified away by investing in both KGI Securities and MCS Steel 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 KGI Securities and MCS Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KGI Securities Public and MCS Steel Public, you can compare the effects of market volatilities on KGI Securities and MCS Steel 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 KGI Securities with a short position of MCS Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and MCS Steel.

Diversification Opportunities for KGI Securities and MCS Steel

0.21

Correlation Coefficient

KGI Securities  MCS Steel

Modest diversification

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

Pair Corralation between KGI Securities and MCS Steel

Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the MCS Steel. But the stock apears to be less risky and, when comparing its historical volatility, KGI Securities Public is 1.28 times less risky than MCS Steel. The stock trades about 0.0 of its potential returns per unit of risk. The MCS Steel Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  750.00  in MCS Steel Public on April 23, 2025 and sell it today you would earn a total of  75.00  from holding MCS Steel Public or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

KGI Securities Public  vs.  MCS Steel Public

KGI Securities Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days KGI Securities Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, KGI Securities is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

MCS Steel Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MCS Steel Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, MCS Steel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KGI Securities and MCS Steel

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

The idea behind KGI Securities Public and MCS Steel Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.