Correlation Between Keppel and Daifuku Co

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

By analyzing existing cross correlation between Keppel Limited and Daifuku Co, you can compare the effects of market volatilities on Keppel and Daifuku Co 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 Keppel with a short position of Daifuku Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keppel and Daifuku Co.

Diversification Opportunities for Keppel and Daifuku Co

-0.1

Correlation Coefficient

Keppel  Daifuku Co

Good diversification

The 3 months correlation between Keppel and Daifuku is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Keppel Limited and Daifuku Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daifuku Co and Keppel 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 Keppel Limited are associated (or correlated) with Daifuku Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daifuku Co has no effect on the direction of Keppel i.e., Keppel and Daifuku Co go up and down completely randomly.

Pair Corralation between Keppel and Daifuku Co

Assuming the 90 days horizon Keppel Limited is expected to generate 0.97 times more return on investment than Daifuku Co. However, Keppel Limited is 1.03 times less risky than Daifuku Co. It trades about 0.13 of its potential returns per unit of risk. Daifuku Co is currently generating about 0.0 per unit of risk. If you would invest  625.00  in Keppel Limited on October 8, 2025 and sell it today you would earn a total of  145.00  from holding Keppel Limited or generate 23.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Keppel Limited  vs.  Daifuku Co

Keppel Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Keppel Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Keppel reported solid returns over the last few months and may actually be approaching a breakup point.

Daifuku Co

Risk-Adjusted Performance

Weakest

Over the last 90 days Daifuku Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Daifuku Co is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Keppel and Daifuku Co

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

The idea behind Keppel Limited and Daifuku Co 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.