Correlation Between KPJ Healthcare and Brite Tech
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare and Brite Tech 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 KPJ Healthcare and Brite Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPJ Healthcare Bhd and Brite Tech Bhd, you can compare the effects of market volatilities on KPJ Healthcare and Brite Tech 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 KPJ Healthcare with a short position of Brite Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and Brite Tech.
Diversification Opportunities for KPJ Healthcare and Brite Tech
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KPJ and Brite is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare Bhd and Brite Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brite Tech Bhd and KPJ Healthcare 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 KPJ Healthcare Bhd are associated (or correlated) with Brite Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brite Tech Bhd has no effect on the direction of KPJ Healthcare i.e., KPJ Healthcare and Brite Tech go up and down completely randomly.
Pair Corralation between KPJ Healthcare and Brite Tech
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 0.64 times more return on investment than Brite Tech. However, KPJ Healthcare Bhd is 1.56 times less risky than Brite Tech. It trades about 0.73 of its potential returns per unit of risk. Brite Tech Bhd is currently generating about 0.09 per unit of risk. If you would invest 207.00 in KPJ Healthcare Bhd on August 30, 2024 and sell it today you would earn a total of 43.00 from holding KPJ Healthcare Bhd or generate 20.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KPJ Healthcare Bhd vs. Brite Tech Bhd
Performance |
Timeline |
KPJ Healthcare Bhd |
Brite Tech Bhd |
KPJ Healthcare and Brite Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KPJ Healthcare and Brite Tech
The main advantage of trading using opposite KPJ Healthcare and Brite Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare position performs unexpectedly, Brite Tech 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 Brite Tech will offset losses from the drop in Brite Tech's long position.KPJ Healthcare vs. Computer Forms Bhd | KPJ Healthcare vs. Impiana Hotels Bhd | KPJ Healthcare vs. Berjaya Food Bhd | KPJ Healthcare vs. Riverview Rubber Estates |
Brite Tech vs. Minetech Resources Bhd | Brite Tech vs. Sunzen Biotech Bhd | Brite Tech vs. Hengyuan Refining | Brite Tech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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