Correlation Between KPJ Healthcare and Al Aqar
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare and Al Aqar 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 Al Aqar 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 Al Aqar Healthcare, you can compare the effects of market volatilities on KPJ Healthcare and Al Aqar 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 Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and Al Aqar.
Diversification Opportunities for KPJ Healthcare and Al Aqar
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KPJ and 5116 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare Bhd and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare 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 Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of KPJ Healthcare i.e., KPJ Healthcare and Al Aqar go up and down completely randomly.
Pair Corralation between KPJ Healthcare and Al Aqar
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 1.33 times more return on investment than Al Aqar. However, KPJ Healthcare is 1.33 times more volatile than Al Aqar Healthcare. It trades about 0.29 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about 0.19 per unit of risk. If you would invest 212.00 in KPJ Healthcare Bhd on August 30, 2024 and sell it today you would earn a total of 35.00 from holding KPJ Healthcare Bhd or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
KPJ Healthcare Bhd vs. Al Aqar Healthcare
Performance |
| Timeline |
| KPJ Healthcare Bhd |
| Al Aqar Healthcare |
KPJ Healthcare and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPJ Healthcare and Al Aqar
The main advantage of trading using opposite KPJ Healthcare and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar'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 |
| Al Aqar vs. Petronas Chemicals Group | Al Aqar vs. TAS Offshore Bhd | Al Aqar vs. Dnonce Tech Bhd | Al Aqar vs. CPE Technology Berhad |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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