Correlation Between KGI Securities and Power Line

Can any of the company-specific risk be diversified away by investing in both KGI Securities and Power Line 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 Power Line 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 Power Line Engineering, you can compare the effects of market volatilities on KGI Securities and Power Line 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 Power Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Power Line.

Diversification Opportunities for KGI Securities and Power Line

0.13

Correlation Coefficient

KGI Securities  Power Line

Average diversification

The 3 months correlation between KGI and Power is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Power Line Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Line Engineering 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 Power Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Line Engineering has no effect on the direction of KGI Securities i.e., KGI Securities and Power Line go up and down completely randomly.

Pair Corralation between KGI Securities and Power Line

Assuming the 90 days trading horizon KGI Securities is expected to generate 78.21 times less return on investment than Power Line. But when comparing it to its historical volatility, KGI Securities Public is 3.71 times less risky than Power Line. It trades about 0.01 of its potential returns per unit of risk. Power Line Engineering is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Power Line Engineering on April 22, 2025 and sell it today you would earn a total of  7.00  from holding Power Line Engineering or generate 33.33% return on investment over 90 days.

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

KGI Securities Public  vs.  Power Line Engineering

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Power Line Engineering

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Power Line Engineering are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Power Line disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KGI Securities and Power Line

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

The idea behind KGI Securities Public and Power Line Engineering 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.