Correlation Between KL Technology and Public Bank
Can any of the company-specific risk be diversified away by investing in both KL Technology and Public Bank 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 Public Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Public Bank Bhd, you can compare the effects of market volatilities on KL Technology and Public Bank 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 Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Public Bank.
Diversification Opportunities for KL Technology and Public Bank
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KLTE and Public is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank 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 Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of KL Technology i.e., KL Technology and Public Bank go up and down completely randomly.
Pair Corralation between KL Technology and Public Bank
Assuming the 90 days trading horizon KL Technology is expected to under-perform the Public Bank. In addition to that, KL Technology is 1.28 times more volatile than Public Bank Bhd. It trades about 0.0 of its total potential returns per unit of risk. Public Bank Bhd is currently generating about 0.03 per unit of volatility. If you would invest 420.00 in Public Bank Bhd on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Public Bank Bhd or generate 5.95% 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. Public Bank Bhd
Performance |
| Timeline |
KL Technology and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Public Bank Bhd
Pair trading matchups for Public Bank
Pair Trading with KL Technology and Public Bank
The main advantage of trading using opposite KL Technology and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's 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 |
| Public Bank vs. Nova Wellness Group | Public Bank vs. Central Industrial Corp | Public Bank vs. Tex Cycle Technology | Public Bank vs. CPE Technology Berhad |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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