Correlation Between Kumpulan Kitacon and Minetech Resources
Can any of the company-specific risk be diversified away by investing in both Kumpulan Kitacon and Minetech Resources 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 Minetech Resources 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 Minetech Resources Bhd, you can compare the effects of market volatilities on Kumpulan Kitacon and Minetech Resources 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 Minetech Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumpulan Kitacon and Minetech Resources.
Diversification Opportunities for Kumpulan Kitacon and Minetech Resources
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kumpulan and Minetech is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kumpulan Kitacon Berhad and Minetech Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minetech Resources Bhd 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 Minetech Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minetech Resources Bhd has no effect on the direction of Kumpulan Kitacon i.e., Kumpulan Kitacon and Minetech Resources go up and down completely randomly.
Pair Corralation between Kumpulan Kitacon and Minetech Resources
Assuming the 90 days trading horizon Kumpulan Kitacon Berhad is expected to under-perform the Minetech Resources. But the stock apears to be less risky and, when comparing its historical volatility, Kumpulan Kitacon Berhad is 3.79 times less risky than Minetech Resources. The stock trades about -0.11 of its potential returns per unit of risk. The Minetech Resources Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Minetech Resources Bhd on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Minetech Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumpulan Kitacon Berhad vs. Minetech Resources Bhd
Performance |
| Timeline |
| Kumpulan Kitacon Berhad |
| Minetech Resources Bhd |
Kumpulan Kitacon and Minetech Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumpulan Kitacon and Minetech Resources
The main advantage of trading using opposite Kumpulan Kitacon and Minetech Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumpulan Kitacon position performs unexpectedly, Minetech Resources 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 Minetech Resources will offset losses from the drop in Minetech Resources' long position.| Kumpulan Kitacon vs. Malayan Banking Bhd | Kumpulan Kitacon vs. Public Bank Bhd | Kumpulan Kitacon vs. Petronas Chemicals Group | Kumpulan Kitacon vs. Tenaga Nasional Bhd |
| Minetech Resources vs. Swift Haulage Bhd | Minetech Resources vs. Sunzen Biotech Bhd | Minetech Resources vs. Hengyuan Refining | Minetech Resources vs. Impiana Hotels 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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