Correlation Between Kumpulan Kitacon and Amalgamated Industrial
Can any of the company-specific risk be diversified away by investing in both Kumpulan Kitacon and Amalgamated Industrial 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 Kumpulan Kitacon and Amalgamated Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumpulan Kitacon Berhad and Amalgamated Industrial Steel, you can compare the effects of market volatilities on Kumpulan Kitacon and Amalgamated Industrial 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 Kumpulan Kitacon with a short position of Amalgamated Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumpulan Kitacon and Amalgamated Industrial.
Diversification Opportunities for Kumpulan Kitacon and Amalgamated Industrial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kumpulan and Amalgamated is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kumpulan Kitacon Berhad and Amalgamated Industrial Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Industrial and Kumpulan Kitacon 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 Kumpulan Kitacon Berhad are associated (or correlated) with Amalgamated Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Industrial has no effect on the direction of Kumpulan Kitacon i.e., Kumpulan Kitacon and Amalgamated Industrial go up and down completely randomly.
Pair Corralation between Kumpulan Kitacon and Amalgamated Industrial
Assuming the 90 days trading horizon Kumpulan Kitacon is expected to generate 2.04 times less return on investment than Amalgamated Industrial. But when comparing it to its historical volatility, Kumpulan Kitacon Berhad is 3.01 times less risky than Amalgamated Industrial. It trades about 0.03 of its potential returns per unit of risk. Amalgamated Industrial Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Amalgamated Industrial Steel on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Amalgamated Industrial Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Kumpulan Kitacon Berhad vs. Amalgamated Industrial Steel
Performance |
| Timeline |
| Kumpulan Kitacon Berhad |
| Amalgamated Industrial |
Kumpulan Kitacon and Amalgamated Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumpulan Kitacon and Amalgamated Industrial
The main advantage of trading using opposite Kumpulan Kitacon and Amalgamated Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumpulan Kitacon position performs unexpectedly, Amalgamated Industrial 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 Amalgamated Industrial will offset losses from the drop in Amalgamated Industrial's long position.| Kumpulan Kitacon vs. Petronas Chemicals Group | Kumpulan Kitacon vs. Press Metal Bhd | Kumpulan Kitacon vs. K One Technology Bhd | Kumpulan Kitacon vs. MClean Technologies Bhd |
| Amalgamated Industrial vs. Fitters Diversified Bhd | Amalgamated Industrial vs. Digistar Bhd | Amalgamated Industrial vs. Minetech Resources Bhd | Amalgamated Industrial vs. OpenSys M 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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