Correlation Between Awanbiru Technology and Lotus KFM
Can any of the company-specific risk be diversified away by investing in both Awanbiru Technology and Lotus KFM 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 Awanbiru Technology and Lotus KFM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awanbiru Technology Bhd and Lotus KFM Bhd, you can compare the effects of market volatilities on Awanbiru Technology and Lotus KFM 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 Awanbiru Technology with a short position of Lotus KFM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awanbiru Technology and Lotus KFM.
Diversification Opportunities for Awanbiru Technology and Lotus KFM
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Awanbiru and Lotus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Awanbiru Technology Bhd and Lotus KFM Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus KFM Bhd and Awanbiru 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 Awanbiru Technology Bhd are associated (or correlated) with Lotus KFM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus KFM Bhd has no effect on the direction of Awanbiru Technology i.e., Awanbiru Technology and Lotus KFM go up and down completely randomly.
Pair Corralation between Awanbiru Technology and Lotus KFM
Assuming the 90 days trading horizon Awanbiru Technology Bhd is expected to generate 1.44 times more return on investment than Lotus KFM. However, Awanbiru Technology is 1.44 times more volatile than Lotus KFM Bhd. It trades about 0.03 of its potential returns per unit of risk. Lotus KFM Bhd is currently generating about -0.03 per unit of risk. If you would invest 35.00 in Awanbiru Technology Bhd on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Awanbiru Technology Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Awanbiru Technology Bhd vs. Lotus KFM Bhd
Performance |
| Timeline |
| Awanbiru Technology Bhd |
| Lotus KFM Bhd |
Awanbiru Technology and Lotus KFM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awanbiru Technology and Lotus KFM
The main advantage of trading using opposite Awanbiru Technology and Lotus KFM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awanbiru Technology position performs unexpectedly, Lotus KFM 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 Lotus KFM will offset losses from the drop in Lotus KFM's long position.| Awanbiru Technology vs. Datasonic Group Bhd | Awanbiru Technology vs. Dataprep Holdings Bhd | Awanbiru Technology vs. Systech Bhd | Awanbiru Technology vs. TechnoDex Bhd |
| Lotus KFM vs. Awanbiru Technology Bhd | Lotus KFM vs. EA Technique M | Lotus KFM vs. Ho Hup Construction | Lotus KFM vs. FARM FRESH 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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