Correlation Between KPJ Healthcare and Magni Tech
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare and Magni 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 Magni 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 Magni Tech Industries, you can compare the effects of market volatilities on KPJ Healthcare and Magni 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 Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and Magni Tech.
Diversification Opportunities for KPJ Healthcare and Magni Tech
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KPJ and Magni is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries 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 Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of KPJ Healthcare i.e., KPJ Healthcare and Magni Tech go up and down completely randomly.
Pair Corralation between KPJ Healthcare and Magni Tech
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 0.67 times more return on investment than Magni Tech. However, KPJ Healthcare Bhd is 1.5 times less risky than Magni Tech. It trades about 0.17 of its potential returns per unit of risk. Magni Tech Industries is currently generating about 0.1 per unit of risk. If you would invest 187.00 in KPJ Healthcare Bhd on September 3, 2024 and sell it today you would earn a total of 57.00 from holding KPJ Healthcare Bhd or generate 30.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPJ Healthcare Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| KPJ Healthcare Bhd |
| Magni Tech Industries |
KPJ Healthcare and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPJ Healthcare and Magni Tech
The main advantage of trading using opposite KPJ Healthcare and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare position performs unexpectedly, Magni 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| KPJ Healthcare vs. K One Technology Bhd | KPJ Healthcare vs. JF Technology BHD | KPJ Healthcare vs. Ho Hup Construction | KPJ Healthcare vs. TAS Offshore Bhd |
| Magni Tech vs. ES Ceramics Technology | Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. Swift Haulage Bhd | Magni Tech vs. Insas 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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