Correlation Between Jasmine International and KGI Securities

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

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

Diversification Opportunities for Jasmine International and KGI Securities

0.75

Correlation Coefficient

Jasmine International  KGI Securities

Poor diversification

The 3 months correlation between Jasmine and KGI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine International 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 Jasmine International 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 Jasmine International 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 Jasmine International i.e., Jasmine International and KGI Securities go up and down completely randomly.

Pair Corralation between Jasmine International and KGI Securities

Assuming the 90 days trading horizon Jasmine International Public is expected to generate 4.56 times more return on investment than KGI Securities. However, Jasmine International is 4.56 times more volatile than KGI Securities Public. It trades about 0.06 of its potential returns per unit of risk. KGI Securities Public is currently generating about 0.01 per unit of risk. If you would invest  153.00  in Jasmine International Public on September 14, 2024 and sell it today you would earn a total of  87.00  from holding Jasmine International Public or generate 56.86% return on investment over 90 days.

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

Jasmine International Public  vs.  KGI Securities Public

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional 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 latest conflicting performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Jasmine International and KGI Securities

The main advantage of trading using opposite Jasmine International and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasmine International 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 Jasmine International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.