Correlation Between K One and Hong Leong
Can any of the company-specific risk be diversified away by investing in both K One and Hong Leong 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 Hong Leong 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 Hong Leong Bank, you can compare the effects of market volatilities on K One and Hong Leong 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 Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of K One and Hong Leong.
Diversification Opportunities for K One and Hong Leong
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0111 and Hong is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding K One Technology Bhd and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank 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 Hong Leong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Leong Bank has no effect on the direction of K One i.e., K One and Hong Leong go up and down completely randomly.
Pair Corralation between K One and Hong Leong
Assuming the 90 days trading horizon K One Technology Bhd is expected to under-perform the Hong Leong. In addition to that, K One is 6.33 times more volatile than Hong Leong Bank. It trades about -0.04 of its total potential returns per unit of risk. Hong Leong Bank is currently generating about 0.08 per unit of volatility. If you would invest 1,880 in Hong Leong Bank on September 14, 2024 and sell it today you would earn a total of 164.00 from holding Hong Leong Bank or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K One Technology Bhd vs. Hong Leong Bank
Performance |
| Timeline |
| K One Technology |
| Hong Leong Bank |
K One and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K One and Hong Leong
The main advantage of trading using opposite K One and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K One position performs unexpectedly, Hong Leong 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 Hong Leong will offset losses from the drop in Hong Leong's long position.| K One vs. Uchi Technologies Bhd | K One vs. Al Aqar Healthcare | K One vs. PMB Technology Bhd | K One vs. Digistar Bhd |
| Hong Leong vs. DC HEALTHCARE HOLDINGS | Hong Leong vs. FARM FRESH BERHAD | Hong Leong vs. Nova Wellness Group | Hong Leong vs. Homeritz 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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