Correlation Between Senheng New and KL Technology
Can any of the company-specific risk be diversified away by investing in both Senheng New 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 Senheng New and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senheng New Retail and KL Technology, you can compare the effects of market volatilities on Senheng New 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 Senheng New with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and KL Technology.
Diversification Opportunities for Senheng New and KL Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senheng and KLTE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and Senheng New 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 Senheng New Retail 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 Senheng New i.e., Senheng New and KL Technology go up and down completely randomly.
Pair Corralation between Senheng New and KL Technology
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the KL Technology. In addition to that, Senheng New is 2.05 times more volatile than KL Technology. It trades about -0.03 of its total potential returns per unit of risk. KL Technology is currently generating about 0.0 per unit of volatility. If you would invest 5,972 in KL Technology on August 31, 2024 and sell it today you would lose (124.00) from holding KL Technology or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. KL Technology
Performance |
| Timeline |
Senheng New and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Senheng New Retail
Pair trading matchups for Senheng New
KL Technology
Pair trading matchups for KL Technology
Pair Trading with Senheng New and KL Technology
The main advantage of trading using opposite Senheng New and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New 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.| Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Bina Darulaman Bhd |
| KL Technology vs. Resintech Bhd | KL Technology vs. Aurelius Technologies Bhd | KL Technology vs. Cloudpoint Technology Berhad | KL Technology vs. Choo Bee Metal |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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