Correlation Between Amanah Leasing and KGI Securities

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

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

Diversification Opportunities for Amanah Leasing and KGI Securities

0.92

Correlation Coefficient

Amanah Leasing  KGI Securities

Almost no diversification

The 3 months correlation between Amanah and KGI is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amanah Leasing 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 Amanah Leasing 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 Amanah Leasing 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 Amanah Leasing i.e., Amanah Leasing and KGI Securities go up and down completely randomly.

Pair Corralation between Amanah Leasing and KGI Securities

Assuming the 90 days trading horizon Amanah Leasing Public is expected to under-perform the KGI Securities. In addition to that, Amanah Leasing is 3.91 times more volatile than KGI Securities Public. It trades about -0.22 of its total potential returns per unit of risk. KGI Securities Public is currently generating about -0.16 per unit of volatility. If you would invest  446.00  in KGI Securities Public on September 13, 2024 and sell it today you would lose (26.00) from holding KGI Securities Public or give up 5.83% of portfolio value over 90 days.

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

Amanah Leasing Public  vs.  KGI Securities Public

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KGI Securities Public

Risk-Adjusted Performance

0 of 100

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 Amanah Leasing and KGI Securities

The main advantage of trading using opposite Amanah Leasing and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanah Leasing 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 Amanah Leasing 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.