Correlation Between Systech Bhd and Kobay Tech
Can any of the company-specific risk be diversified away by investing in both Systech Bhd and Kobay Tech 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 Systech Bhd and Kobay Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systech Bhd and Kobay Tech Bhd, you can compare the effects of market volatilities on Systech Bhd and Kobay Tech 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 Systech Bhd with a short position of Kobay Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systech Bhd and Kobay Tech.
Diversification Opportunities for Systech Bhd and Kobay Tech
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Systech and Kobay is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Systech Bhd and Kobay Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kobay Tech Bhd and Systech Bhd 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 Systech Bhd are associated (or correlated) with Kobay Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kobay Tech Bhd has no effect on the direction of Systech Bhd i.e., Systech Bhd and Kobay Tech go up and down completely randomly.
Pair Corralation between Systech Bhd and Kobay Tech
Assuming the 90 days trading horizon Systech Bhd is expected to generate 0.92 times more return on investment than Kobay Tech. However, Systech Bhd is 1.09 times less risky than Kobay Tech. It trades about -0.03 of its potential returns per unit of risk. Kobay Tech Bhd is currently generating about -0.04 per unit of risk. If you would invest 32.00 in Systech Bhd on November 3, 2024 and sell it today you would lose (6.00) from holding Systech Bhd or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systech Bhd vs. Kobay Tech Bhd
Performance |
| Timeline |
| Systech Bhd |
| Kobay Tech Bhd |
Systech Bhd and Kobay Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systech Bhd and Kobay Tech
The main advantage of trading using opposite Systech Bhd and Kobay Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systech Bhd position performs unexpectedly, Kobay Tech 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 Kobay Tech will offset losses from the drop in Kobay Tech's long position.| Systech Bhd vs. YTL Hospitality REIT | Systech Bhd vs. Homeritz Bhd | Systech Bhd vs. British American Tobacco | Systech Bhd vs. Binasat Communications Bhd |
| Kobay Tech vs. Kluang Rubber | Kobay Tech vs. Binasat Communications Bhd | Kobay Tech vs. Computer Forms Bhd | Kobay Tech vs. Public Bank 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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