Correlation Between Lalin Property and KGI Securities

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

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

Diversification Opportunities for Lalin Property and KGI Securities

0.69

Correlation Coefficient

Lalin Property  KGI Securities

Poor diversification

The 3 months correlation between Lalin and KGI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and Lalin Property 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 Lalin Property Public are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of Lalin Property i.e., Lalin Property and KGI Securities go up and down completely randomly.

Pair Corralation between Lalin Property and KGI Securities

Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the KGI Securities. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 2.49 times less risky than KGI Securities. The stock trades about -0.11 of its potential returns per unit of risk. The KGI Securities Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  394.00  in KGI Securities Public on April 24, 2025 and sell it today you would lose (8.00) from holding KGI Securities Public or give up 2.03% of portfolio value over 90 days.

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

Lalin Property Public  vs.  KGI Securities Public

Lalin Property Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lalin Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Lalin Property is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Lalin Property and KGI Securities

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

The idea behind Lalin Property Public and KGI Securities 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.