Correlation Between Mercury Industries and KL Technology
Can any of the company-specific risk be diversified away by investing in both Mercury Industries and KL Technology 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 Mercury Industries and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercury Industries Bhd and KL Technology, you can compare the effects of market volatilities on Mercury Industries and KL Technology 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 Mercury Industries with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercury Industries and KL Technology.
Diversification Opportunities for Mercury Industries and KL Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercury and KLTE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mercury Industries Bhd and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and Mercury Industries 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 Mercury Industries Bhd are associated (or correlated) with KL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KL Technology has no effect on the direction of Mercury Industries i.e., Mercury Industries and KL Technology go up and down completely randomly.
Pair Corralation between Mercury Industries and KL Technology
Assuming the 90 days trading horizon Mercury Industries Bhd is expected to generate 2.58 times more return on investment than KL Technology. However, Mercury Industries is 2.58 times more volatile than KL Technology. It trades about 0.01 of its potential returns per unit of risk. KL Technology is currently generating about 0.0 per unit of risk. If you would invest 97.00 in Mercury Industries Bhd on September 14, 2024 and sell it today you would lose (6.00) from holding Mercury Industries Bhd or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mercury Industries Bhd vs. KL Technology
Performance |
| Timeline |
Mercury Industries and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Mercury Industries Bhd
Pair trading matchups for Mercury Industries
KL Technology
Pair trading matchups for KL Technology
Pair Trading with Mercury Industries and KL Technology
The main advantage of trading using opposite Mercury Industries and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercury Industries position performs unexpectedly, KL Technology 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 KL Technology will offset losses from the drop in KL Technology's long position.| Mercury Industries vs. Sunway Construction Group | Mercury Industries vs. PESTECH International Bhd | Mercury Industries vs. Ho Hup Construction | Mercury Industries vs. Central Industrial Corp |
| KL Technology vs. Choo Bee Metal | KL Technology vs. Mercury Industries Bhd | KL Technology vs. Senheng New Retail | KL Technology vs. Carlsberg Brewery Malaysia |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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