Correlation Between OpenSys M and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both OpenSys M and KPJ Healthcare 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 OpenSys M and KPJ Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OpenSys M Bhd and KPJ Healthcare Bhd, you can compare the effects of market volatilities on OpenSys M and KPJ Healthcare 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 OpenSys M with a short position of KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of OpenSys M and KPJ Healthcare.
Diversification Opportunities for OpenSys M and KPJ Healthcare
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OpenSys and KPJ is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding OpenSys M Bhd and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare Bhd and OpenSys M 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 OpenSys M Bhd are associated (or correlated) with KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of OpenSys M i.e., OpenSys M and KPJ Healthcare go up and down completely randomly.
Pair Corralation between OpenSys M and KPJ Healthcare
Assuming the 90 days trading horizon OpenSys M is expected to generate 5.89 times less return on investment than KPJ Healthcare. In addition to that, OpenSys M is 1.39 times more volatile than KPJ Healthcare Bhd. It trades about 0.02 of its total potential returns per unit of risk. KPJ Healthcare Bhd is currently generating about 0.18 per unit of volatility. If you would invest 131.00 in KPJ Healthcare Bhd on August 27, 2024 and sell it today you would earn a total of 98.00 from holding KPJ Healthcare Bhd or generate 74.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OpenSys M Bhd vs. KPJ Healthcare Bhd
Performance |
| Timeline |
| OpenSys M Bhd |
| KPJ Healthcare Bhd |
OpenSys M and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OpenSys M and KPJ Healthcare
The main advantage of trading using opposite OpenSys M and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OpenSys M position performs unexpectedly, KPJ Healthcare 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| OpenSys M vs. Malayan Banking Bhd | OpenSys M vs. Public Bank Bhd | OpenSys M vs. Petronas Chemicals Group | OpenSys M vs. Tenaga Nasional Bhd |
| KPJ Healthcare vs. Lyc Healthcare Bhd | KPJ Healthcare vs. Digistar Bhd | KPJ Healthcare vs. Minetech Resources Bhd | KPJ Healthcare vs. OpenSys M Bhd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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