Correlation Between KL Technology and AMMB Holdings
Can any of the company-specific risk be diversified away by investing in both KL Technology and AMMB Holdings 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 AMMB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and AMMB Holdings Bhd, you can compare the effects of market volatilities on KL Technology and AMMB Holdings 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 AMMB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and AMMB Holdings.
Diversification Opportunities for KL Technology and AMMB Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KLTE and AMMB is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and AMMB Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMMB Holdings 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 AMMB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMMB Holdings Bhd has no effect on the direction of KL Technology i.e., KL Technology and AMMB Holdings go up and down completely randomly.
Pair Corralation between KL Technology and AMMB Holdings
Assuming the 90 days trading horizon KL Technology is expected to under-perform the AMMB Holdings. In addition to that, KL Technology is 1.13 times more volatile than AMMB Holdings Bhd. It trades about -0.06 of its total potential returns per unit of risk. AMMB Holdings Bhd is currently generating about 0.05 per unit of volatility. If you would invest 520.00 in AMMB Holdings Bhd on August 28, 2024 and sell it today you would earn a total of 20.00 from holding AMMB Holdings Bhd or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. AMMB Holdings Bhd
Performance |
| Timeline |
KL Technology and AMMB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
AMMB Holdings Bhd
Pair trading matchups for AMMB Holdings
Pair Trading with KL Technology and AMMB Holdings
The main advantage of trading using opposite KL Technology and AMMB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, AMMB Holdings 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 AMMB Holdings will offset losses from the drop in AMMB Holdings' long position.| KL Technology vs. Rubberex M | KL Technology vs. Senheng New Retail | KL Technology vs. Uchi Technologies Bhd | KL Technology vs. Duopharma Biotech Bhd |
| AMMB Holdings vs. Binasat Communications Bhd | AMMB Holdings vs. Star Media Group | AMMB Holdings vs. Kluang Rubber | AMMB Holdings vs. Lyc Healthcare 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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