Correlation Between KGI Securities and TISCO Financial

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

Diversification Opportunities for KGI Securities and TISCO Financial

0.45

Correlation Coefficient

KGI Securities  TISCO Financial

Very weak diversification

The 3 months correlation between KGI and TISCO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group 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 TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of KGI Securities i.e., KGI Securities and TISCO Financial go up and down completely randomly.

Pair Corralation between KGI Securities and TISCO Financial

Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the TISCO Financial. In addition to that, KGI Securities is 1.37 times more volatile than TISCO Financial Group. It trades about -0.16 of its total potential returns per unit of risk. TISCO Financial Group is currently generating about -0.02 per unit of volatility. If you would invest  9,750  in TISCO Financial Group on September 13, 2024 and sell it today you would lose (50.00) from holding TISCO Financial Group or give up 0.51% of portfolio value over 90 days.

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

KGI Securities Public  vs.  TISCO Financial Group

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.

TISCO Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with KGI Securities and TISCO Financial

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

The idea behind KGI Securities Public and TISCO Financial Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.