Correlation Between KL Technology and TechnoDex Bhd
Can any of the company-specific risk be diversified away by investing in both KL Technology and TechnoDex 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 KL Technology and TechnoDex Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and TechnoDex Bhd, you can compare the effects of market volatilities on KL Technology and TechnoDex 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 KL Technology with a short position of TechnoDex Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and TechnoDex Bhd.
Diversification Opportunities for KL Technology and TechnoDex Bhd
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between KLTE and TechnoDex is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and TechnoDex Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoDex Bhd 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 TechnoDex Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoDex Bhd has no effect on the direction of KL Technology i.e., KL Technology and TechnoDex Bhd go up and down completely randomly.
Pair Corralation between KL Technology and TechnoDex Bhd
Assuming the 90 days trading horizon KL Technology is expected to generate 26.52 times less return on investment than TechnoDex Bhd. But when comparing it to its historical volatility, KL Technology is 3.61 times less risky than TechnoDex Bhd. It trades about 0.01 of its potential returns per unit of risk. TechnoDex Bhd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5.50 in TechnoDex Bhd on August 31, 2024 and sell it today you would earn a total of 0.50 from holding TechnoDex Bhd or generate 9.09% 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. TechnoDex Bhd
Performance |
| Timeline |
KL Technology and TechnoDex Bhd Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
TechnoDex Bhd
Pair trading matchups for TechnoDex Bhd
Pair Trading with KL Technology and TechnoDex Bhd
The main advantage of trading using opposite KL Technology and TechnoDex Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, TechnoDex 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 TechnoDex Bhd will offset losses from the drop in TechnoDex Bhd's long position.| KL Technology vs. Resintech Bhd | KL Technology vs. Aurelius Technologies Bhd | KL Technology vs. Cloudpoint Technology Berhad | KL Technology vs. Choo Bee Metal |
| TechnoDex Bhd vs. Datasonic Group Bhd | TechnoDex Bhd vs. Awanbiru Technology Bhd | TechnoDex Bhd vs. Dataprep Holdings Bhd | TechnoDex Bhd vs. Systech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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