Correlation Between KL Technology and Silver Ridge
Can any of the company-specific risk be diversified away by investing in both KL Technology and Silver Ridge 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 KL Technology and Silver Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Silver Ridge Holdings, you can compare the effects of market volatilities on KL Technology and Silver Ridge 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 KL Technology with a short position of Silver Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Silver Ridge.
Diversification Opportunities for KL Technology and Silver Ridge
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between KLTE and Silver is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Silver Ridge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Ridge Holdings and KL Technology 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 KL Technology are associated (or correlated) with Silver Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Ridge Holdings has no effect on the direction of KL Technology i.e., KL Technology and Silver Ridge go up and down completely randomly.
Pair Corralation between KL Technology and Silver Ridge
Assuming the 90 days trading horizon KL Technology is expected to under-perform the Silver Ridge. But the index apears to be less risky and, when comparing its historical volatility, KL Technology is 1.9 times less risky than Silver Ridge. The index trades about -0.1 of its potential returns per unit of risk. The Silver Ridge Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Silver Ridge Holdings on September 2, 2024 and sell it today you would earn a total of 24.00 from holding Silver Ridge Holdings or generate 61.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. Silver Ridge Holdings
Performance |
| Timeline |
KL Technology and Silver Ridge Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Silver Ridge Holdings
Pair trading matchups for Silver Ridge
Pair Trading with KL Technology and Silver Ridge
The main advantage of trading using opposite KL Technology and Silver Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Silver Ridge 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 Silver Ridge will offset losses from the drop in Silver Ridge's long position.| KL Technology vs. Awanbiru Technology Bhd | KL Technology vs. Media Prima Bhd | KL Technology vs. Tex Cycle Technology | KL Technology vs. Carlsberg Brewery Malaysia |
| Silver Ridge vs. Malayan Banking Bhd | Silver Ridge vs. Public Bank Bhd | Silver Ridge vs. Petronas Chemicals Group | Silver Ridge vs. Tenaga Nasional 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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