Correlation Between Keck Seng and ASSOC BR

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

By analyzing existing cross correlation between Keck Seng Investments and ASSOC BR FOODS, you can compare the effects of market volatilities on Keck Seng and ASSOC BR 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 Keck Seng with a short position of ASSOC BR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and ASSOC BR.

Diversification Opportunities for Keck Seng and ASSOC BR

0.71

Correlation Coefficient

Keck Seng  ASSOC BR

Poor diversification

The 3 months correlation between Keck and ASSOC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS and Keck Seng 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 Keck Seng Investments are associated (or correlated) with ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of Keck Seng i.e., Keck Seng and ASSOC BR go up and down completely randomly.

Pair Corralation between Keck Seng and ASSOC BR

Assuming the 90 days horizon Keck Seng Investments is expected to generate 3.27 times more return on investment than ASSOC BR. However, Keck Seng is 3.27 times more volatile than ASSOC BR FOODS. It trades about 0.08 of its potential returns per unit of risk. ASSOC BR FOODS is currently generating about 0.09 per unit of risk. If you would invest  22.00  in Keck Seng Investments on May 3, 2025 and sell it today you would earn a total of  4.00  from holding Keck Seng Investments or generate 18.18% return on investment over 90 days.

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

Keck Seng Investments  vs.  ASSOC BR FOODS

Keck Seng Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Keck Seng Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Keck Seng reported solid returns over the last few months and may actually be approaching a breakup point.

ASSOC BR FOODS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASSOC BR FOODS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ASSOC BR may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Keck Seng and ASSOC BR

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

The idea behind Keck Seng Investments and ASSOC BR FOODS 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.