Correlation Between K One and Greatech Technology
Can any of the company-specific risk be diversified away by investing in both K One and Greatech Technology 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 Greatech Technology 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 Greatech Technology Bhd, you can compare the effects of market volatilities on K One and Greatech Technology 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 Greatech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of K One and Greatech Technology.
Diversification Opportunities for K One and Greatech Technology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0111 and Greatech is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding K One Technology Bhd and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology 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 Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of K One i.e., K One and Greatech Technology go up and down completely randomly.
Pair Corralation between K One and Greatech Technology
Assuming the 90 days trading horizon K One Technology Bhd is expected to generate 1.72 times more return on investment than Greatech Technology. However, K One is 1.72 times more volatile than Greatech Technology Bhd. It trades about -0.02 of its potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.09 per unit of risk. If you would invest 19.00 in K One Technology Bhd on August 31, 2024 and sell it today you would lose (2.00) from holding K One Technology Bhd or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K One Technology Bhd vs. Greatech Technology Bhd
Performance |
| Timeline |
| K One Technology |
| Greatech Technology Bhd |
K One and Greatech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K One and Greatech Technology
The main advantage of trading using opposite K One and Greatech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K One position performs unexpectedly, Greatech Technology 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 Greatech Technology will offset losses from the drop in Greatech Technology's long position.| K One vs. Sports Toto Berhad | K One vs. Choo Bee Metal | K One vs. MyTech Group Bhd | K One vs. IHH Healthcare Bhd |
| Greatech Technology vs. YX Precious Metals | Greatech Technology vs. Choo Bee Metal | Greatech Technology vs. Homeritz Bhd | Greatech Technology vs. Sports Toto Berhad |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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