Correlation Between TechnoDex Bhd and Kobay Tech
Can any of the company-specific risk be diversified away by investing in both TechnoDex 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 TechnoDex 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 TechnoDex Bhd and Kobay Tech Bhd, you can compare the effects of market volatilities on TechnoDex 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 TechnoDex Bhd with a short position of Kobay Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnoDex Bhd and Kobay Tech.
Diversification Opportunities for TechnoDex Bhd and Kobay Tech
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TechnoDex and Kobay is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TechnoDex 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 TechnoDex 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 TechnoDex 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 TechnoDex Bhd i.e., TechnoDex Bhd and Kobay Tech go up and down completely randomly.
Pair Corralation between TechnoDex Bhd and Kobay Tech
Assuming the 90 days trading horizon TechnoDex Bhd is expected to generate 1.56 times more return on investment than Kobay Tech. However, TechnoDex Bhd is 1.56 times more volatile than Kobay Tech Bhd. It trades about 0.01 of its potential returns per unit of risk. Kobay Tech Bhd is currently generating about -0.03 per unit of risk. If you would invest 10.00 in TechnoDex Bhd on August 28, 2024 and sell it today you would lose (3.50) from holding TechnoDex Bhd or give up 35.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechnoDex Bhd vs. Kobay Tech Bhd
Performance |
| Timeline |
| TechnoDex Bhd |
| Kobay Tech Bhd |
TechnoDex Bhd and Kobay Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnoDex Bhd and Kobay Tech
The main advantage of trading using opposite TechnoDex Bhd and Kobay Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnoDex 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.| TechnoDex Bhd vs. ES Ceramics Technology | TechnoDex Bhd vs. Cloudpoint Technology Berhad | TechnoDex Bhd vs. Mycron Steel Bhd | TechnoDex Bhd vs. Cengild Medical 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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