Correlation Between KL Technology and CIMB Group
Can any of the company-specific risk be diversified away by investing in both KL Technology and CIMB Group 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 CIMB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and CIMB Group Holdings, you can compare the effects of market volatilities on KL Technology and CIMB Group 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 CIMB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and CIMB Group.
Diversification Opportunities for KL Technology and CIMB Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLTE and CIMB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and CIMB Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Group 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 CIMB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Group Holdings has no effect on the direction of KL Technology i.e., KL Technology and CIMB Group go up and down completely randomly.
Pair Corralation between KL Technology and CIMB Group
Assuming the 90 days trading horizon KL Technology is expected to generate 6.58 times less return on investment than CIMB Group. In addition to that, KL Technology is 2.42 times more volatile than CIMB Group Holdings. It trades about 0.01 of its total potential returns per unit of risk. CIMB Group Holdings is currently generating about 0.21 per unit of volatility. If you would invest 799.00 in CIMB Group Holdings on August 31, 2024 and sell it today you would earn a total of 26.00 from holding CIMB Group Holdings or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KL Technology vs. CIMB Group Holdings
Performance |
| Timeline |
KL Technology and CIMB Group Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
CIMB Group Holdings
Pair trading matchups for CIMB Group
Pair Trading with KL Technology and CIMB Group
The main advantage of trading using opposite KL Technology and CIMB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, CIMB Group 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 CIMB Group will offset losses from the drop in CIMB Group'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 |
| CIMB Group vs. KPJ Healthcare Bhd | CIMB Group vs. IHH Healthcare Bhd | CIMB Group vs. Apex Healthcare Bhd | CIMB Group vs. TAS Offshore 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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