Correlation Between Kobay Tech and IOI Bhd
Can any of the company-specific risk be diversified away by investing in both Kobay Tech and IOI Bhd 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 Kobay Tech and IOI Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kobay Tech Bhd and IOI Bhd, you can compare the effects of market volatilities on Kobay Tech and IOI Bhd 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 Kobay Tech with a short position of IOI Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and IOI Bhd.
Diversification Opportunities for Kobay Tech and IOI Bhd
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kobay and IOI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and IOI Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOI Bhd and Kobay Tech 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 Kobay Tech Bhd are associated (or correlated) with IOI Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOI Bhd has no effect on the direction of Kobay Tech i.e., Kobay Tech and IOI Bhd go up and down completely randomly.
Pair Corralation between Kobay Tech and IOI Bhd
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to generate 3.33 times more return on investment than IOI Bhd. However, Kobay Tech is 3.33 times more volatile than IOI Bhd. It trades about 0.2 of its potential returns per unit of risk. IOI Bhd is currently generating about -0.08 per unit of risk. If you would invest 126.00 in Kobay Tech Bhd on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Kobay Tech Bhd or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kobay Tech Bhd vs. IOI Bhd
Performance |
| Timeline |
| Kobay Tech Bhd |
| IOI Bhd |
Kobay Tech and IOI Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and IOI Bhd
The main advantage of trading using opposite Kobay Tech and IOI Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech position performs unexpectedly, IOI Bhd 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 IOI Bhd will offset losses from the drop in IOI Bhd's long position.| Kobay Tech vs. Sports Toto Berhad | Kobay Tech vs. Choo Bee Metal | Kobay Tech vs. Press Metal Bhd | Kobay Tech vs. Tex Cycle Technology |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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