Correlation Between Sungei Bagan and K One
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and K One 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 Sungei Bagan and K One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and K One Technology Bhd, you can compare the effects of market volatilities on Sungei Bagan and K One 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 Sungei Bagan with a short position of K One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and K One.
Diversification Opportunities for Sungei Bagan and K One
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungei and 0111 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and K One Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K One Technology and Sungei Bagan 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 Sungei Bagan Rubber are associated (or correlated) with K One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K One Technology has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and K One go up and down completely randomly.
Pair Corralation between Sungei Bagan and K One
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the K One. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 5.15 times less risky than K One. The stock trades about -0.31 of its potential returns per unit of risk. The K One Technology Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 17.00 in K One Technology Bhd on September 1, 2024 and sell it today you would earn a total of 0.00 from holding K One Technology Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. K One Technology Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| K One Technology |
Sungei Bagan and K One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and K One
The main advantage of trading using opposite Sungei Bagan and K One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, K One 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 K One will offset losses from the drop in K One's long position.| Sungei Bagan vs. Eonmetall Group Bhd | Sungei Bagan vs. Sapura Industrial Bhd | Sungei Bagan vs. Mycron Steel Bhd | Sungei Bagan vs. Daya Materials Bhd |
| K One vs. Sungei Bagan Rubber | K One vs. British American Tobacco | K One vs. Lyc Healthcare Bhd | K One vs. Rubberex M |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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