Correlation Between MI Technovation and KL Technology
Can any of the company-specific risk be diversified away by investing in both MI Technovation 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 MI Technovation and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and KL Technology, you can compare the effects of market volatilities on MI Technovation 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 MI Technovation with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and KL Technology.
Diversification Opportunities for MI Technovation and KL Technology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 5286 and KLTE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation Bhd and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and MI Technovation 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 MI Technovation 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 MI Technovation i.e., MI Technovation and KL Technology go up and down completely randomly.
Pair Corralation between MI Technovation and KL Technology
Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 1.65 times more return on investment than KL Technology. However, MI Technovation is 1.65 times more volatile than KL Technology. It trades about 0.05 of its potential returns per unit of risk. KL Technology is currently generating about 0.02 per unit of risk. If you would invest 184.00 in MI Technovation Bhd on August 27, 2024 and sell it today you would earn a total of 4.00 from holding MI Technovation Bhd or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. KL Technology
Performance |
| Timeline |
MI Technovation and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
MI Technovation Bhd
Pair trading matchups for MI Technovation
KL Technology
Pair trading matchups for KL Technology
Pair Trading with MI Technovation and KL Technology
The main advantage of trading using opposite MI Technovation and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation 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.| MI Technovation vs. Sports Toto Berhad | MI Technovation vs. IHH Healthcare Bhd | MI Technovation vs. DC HEALTHCARE HOLDINGS | MI Technovation vs. CSC Steel Holdings |
| KL Technology vs. SFP Tech Holdings | KL Technology vs. Radiant Globaltech Bhd | KL Technology vs. Computer Forms Bhd | KL Technology vs. Shangri La Hotels |
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.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |