Correlation Between Greatech Technology and KL Technology
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and KL 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 Greatech Technology and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and KL Technology, you can compare the effects of market volatilities on Greatech Technology and KL 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 Greatech Technology with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and KL Technology.
Diversification Opportunities for Greatech Technology and KL Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greatech and KLTE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and Greatech Technology 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 Greatech Technology Bhd are associated (or correlated) with KL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KL Technology has no effect on the direction of Greatech Technology i.e., Greatech Technology and KL Technology go up and down completely randomly.
Pair Corralation between Greatech Technology and KL Technology
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the KL Technology. In addition to that, Greatech Technology is 1.03 times more volatile than KL Technology. It trades about -0.16 of its total potential returns per unit of risk. KL Technology is currently generating about -0.16 per unit of volatility. If you would invest 6,402 in KL Technology on October 22, 2024 and sell it today you would lose (273.00) from holding KL Technology or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. KL Technology
Performance |
| Timeline |
Greatech Technology and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Greatech Technology Bhd
Pair trading matchups for Greatech Technology
KL Technology
Pair trading matchups for KL Technology
Pair Trading with Greatech Technology and KL Technology
The main advantage of trading using opposite Greatech Technology and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, KL 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 KL Technology will offset losses from the drop in KL Technology's long position.| Greatech Technology vs. Uchi Technologies Bhd | Greatech Technology vs. PMB Technology Bhd | Greatech Technology vs. TAS Offshore Bhd | Greatech Technology vs. YX Precious Metals |
| KL Technology vs. Computer Forms Bhd | KL Technology vs. Choo Bee Metal | KL Technology vs. Greatech Technology Bhd | KL Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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