Correlation Between K One and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both K One and MClean Technologies 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 K One and MClean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K One Technology Bhd and MClean Technologies Bhd, you can compare the effects of market volatilities on K One and MClean Technologies 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 K One with a short position of MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of K One and MClean Technologies.
Diversification Opportunities for K One and MClean Technologies
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0111 and MClean is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding K One Technology Bhd and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and K One 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 K One Technology Bhd are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of K One i.e., K One and MClean Technologies go up and down completely randomly.
Pair Corralation between K One and MClean Technologies
Assuming the 90 days trading horizon K One Technology Bhd is expected to under-perform the MClean Technologies. But the stock apears to be less risky and, when comparing its historical volatility, K One Technology Bhd is 1.11 times less risky than MClean Technologies. The stock trades about -0.36 of its potential returns per unit of risk. The MClean Technologies Bhd is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 32.00 in MClean Technologies Bhd on November 2, 2024 and sell it today you would lose (4.00) from holding MClean Technologies Bhd or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K One Technology Bhd vs. MClean Technologies Bhd
Performance |
| Timeline |
| K One Technology |
| MClean Technologies Bhd |
K One and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K One and MClean Technologies
The main advantage of trading using opposite K One and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K One position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| K One vs. Homeritz Bhd | K One vs. Binasat Communications Bhd | K One vs. Steel Hawk Berhad | K One vs. Cosmos Technology International |
| MClean Technologies vs. MI Technovation Bhd | MClean Technologies vs. Resintech Bhd | MClean Technologies vs. Bank Islam Malaysia | MClean Technologies vs. Southern Steel 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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