Correlation Between MClean Technologies and Kawan Food
Can any of the company-specific risk be diversified away by investing in both MClean Technologies and Kawan Food 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 MClean Technologies and Kawan Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MClean Technologies Bhd and Kawan Food Bhd, you can compare the effects of market volatilities on MClean Technologies and Kawan Food 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 MClean Technologies with a short position of Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Kawan Food.
Diversification Opportunities for MClean Technologies and Kawan Food
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MClean and Kawan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies Bhd and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food Bhd and MClean Technologies 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 MClean Technologies Bhd are associated (or correlated) with Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of MClean Technologies i.e., MClean Technologies and Kawan Food go up and down completely randomly.
Pair Corralation between MClean Technologies and Kawan Food
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to generate 6.77 times more return on investment than Kawan Food. However, MClean Technologies is 6.77 times more volatile than Kawan Food Bhd. It trades about 0.07 of its potential returns per unit of risk. Kawan Food Bhd is currently generating about -0.02 per unit of risk. If you would invest 16.00 in MClean Technologies Bhd on September 14, 2024 and sell it today you would earn a total of 13.00 from holding MClean Technologies Bhd or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Kawan Food Bhd
Performance |
| Timeline |
| MClean Technologies Bhd |
| Kawan Food Bhd |
MClean Technologies and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Kawan Food
The main advantage of trading using opposite MClean Technologies and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| MClean Technologies vs. Computer Forms Bhd | MClean Technologies vs. Tex Cycle Technology | MClean Technologies vs. Al Aqar Healthcare | MClean Technologies vs. PMB Technology Bhd |
| Kawan Food vs. Riverview Rubber Estates | Kawan Food vs. DC HEALTHCARE HOLDINGS | Kawan Food vs. Sports Toto Berhad | Kawan Food vs. Lyc Healthcare 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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