Correlation Between KL Technology and YX Precious
Can any of the company-specific risk be diversified away by investing in both KL Technology and YX Precious 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 YX Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and YX Precious Metals, you can compare the effects of market volatilities on KL Technology and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and YX Precious.
Diversification Opportunities for KL Technology and YX Precious
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLTE and 0250 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of KL Technology i.e., KL Technology and YX Precious go up and down completely randomly.
Pair Corralation between KL Technology and YX Precious
Assuming the 90 days trading horizon KL Technology is expected to generate 0.8 times more return on investment than YX Precious. However, KL Technology is 1.24 times less risky than YX Precious. It trades about 0.02 of its potential returns per unit of risk. YX Precious Metals is currently generating about -0.17 per unit of risk. If you would invest 5,893 in KL Technology on August 27, 2024 and sell it today you would earn a total of 23.00 from holding KL Technology or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. YX Precious Metals
Performance |
| Timeline |
KL Technology and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
YX Precious Metals
Pair trading matchups for YX Precious
Pair Trading with KL Technology and YX Precious
The main advantage of trading using opposite KL Technology and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| KL Technology vs. SFP Tech Holdings | KL Technology vs. Radiant Globaltech Bhd | KL Technology vs. Computer Forms Bhd | KL Technology vs. Shangri La Hotels |
| YX Precious vs. Malayan Banking Bhd | YX Precious vs. Public Bank Bhd | YX Precious vs. Petronas Chemicals Group | YX Precious 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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