Correlation Between ViTrox Bhd and Kumpulan Kitacon
Can any of the company-specific risk be diversified away by investing in both ViTrox Bhd and Kumpulan Kitacon 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 ViTrox Bhd and Kumpulan Kitacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ViTrox Bhd and Kumpulan Kitacon Berhad, you can compare the effects of market volatilities on ViTrox Bhd and Kumpulan Kitacon 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 ViTrox Bhd with a short position of Kumpulan Kitacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ViTrox Bhd and Kumpulan Kitacon.
Diversification Opportunities for ViTrox Bhd and Kumpulan Kitacon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ViTrox and Kumpulan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ViTrox Bhd and Kumpulan Kitacon Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumpulan Kitacon Berhad and ViTrox 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 ViTrox Bhd are associated (or correlated) with Kumpulan Kitacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumpulan Kitacon Berhad has no effect on the direction of ViTrox Bhd i.e., ViTrox Bhd and Kumpulan Kitacon go up and down completely randomly.
Pair Corralation between ViTrox Bhd and Kumpulan Kitacon
Assuming the 90 days trading horizon ViTrox Bhd is expected to under-perform the Kumpulan Kitacon. In addition to that, ViTrox Bhd is 1.19 times more volatile than Kumpulan Kitacon Berhad. It trades about -0.01 of its total potential returns per unit of risk. Kumpulan Kitacon Berhad is currently generating about 0.03 per unit of volatility. If you would invest 63.00 in Kumpulan Kitacon Berhad on August 27, 2024 and sell it today you would earn a total of 9.00 from holding Kumpulan Kitacon Berhad or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
ViTrox Bhd vs. Kumpulan Kitacon Berhad
Performance |
| Timeline |
| ViTrox Bhd |
| Kumpulan Kitacon Berhad |
ViTrox Bhd and Kumpulan Kitacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ViTrox Bhd and Kumpulan Kitacon
The main advantage of trading using opposite ViTrox Bhd and Kumpulan Kitacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ViTrox Bhd position performs unexpectedly, Kumpulan Kitacon 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 Kumpulan Kitacon will offset losses from the drop in Kumpulan Kitacon's long position.The idea behind ViTrox Bhd and Kumpulan Kitacon Berhad 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.| Kumpulan Kitacon vs. Malayan Banking Bhd | Kumpulan Kitacon vs. Public Bank Bhd | Kumpulan Kitacon vs. Petronas Chemicals Group | Kumpulan Kitacon vs. Tenaga Nasional 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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