Correlation Between Awanbiru Technology and KL Technology
Can any of the company-specific risk be diversified away by investing in both Awanbiru 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 Awanbiru 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 Awanbiru Technology Bhd and KL Technology, you can compare the effects of market volatilities on Awanbiru 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 Awanbiru Technology with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awanbiru Technology and KL Technology.
Diversification Opportunities for Awanbiru Technology and KL Technology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Awanbiru and KLTE is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Awanbiru 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 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 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 Awanbiru Technology i.e., Awanbiru Technology and KL Technology go up and down completely randomly.
Pair Corralation between Awanbiru Technology and KL Technology
Assuming the 90 days trading horizon Awanbiru Technology Bhd is expected to generate 4.87 times more return on investment than KL Technology. However, Awanbiru Technology is 4.87 times more volatile than KL Technology. It trades about 0.02 of its potential returns per unit of risk. KL Technology is currently generating about -0.02 per unit of risk. If you would invest 40.00 in Awanbiru Technology Bhd on September 3, 2024 and sell it today you would lose (8.00) from holding Awanbiru Technology Bhd or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Awanbiru Technology Bhd vs. KL Technology
Performance |
| Timeline |
Awanbiru Technology and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Awanbiru Technology Bhd
Pair trading matchups for Awanbiru Technology
KL Technology
Pair trading matchups for KL Technology
Pair Trading with Awanbiru Technology and KL Technology
The main advantage of trading using opposite Awanbiru Technology and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awanbiru 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.| Awanbiru Technology vs. Dagang Nexchange Bhd | Awanbiru Technology vs. Datasonic Group Bhd | Awanbiru Technology vs. TechnoDex Bhd | Awanbiru Technology vs. Diversified Gateway Solutions |
| KL Technology vs. Computer Forms Bhd | KL Technology vs. Lyc Healthcare Bhd | KL Technology vs. Senheng New Retail | KL Technology vs. Uchi Technologies 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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