Correlation Between KL Technology and Sungei Bagan
Can any of the company-specific risk be diversified away by investing in both KL Technology and Sungei Bagan 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 Sungei Bagan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Sungei Bagan Rubber, you can compare the effects of market volatilities on KL Technology and Sungei Bagan 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 Sungei Bagan. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Sungei Bagan.
Diversification Opportunities for KL Technology and Sungei Bagan
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KLTE and Sungei is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Sungei Bagan Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungei Bagan Rubber 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 Sungei Bagan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungei Bagan Rubber has no effect on the direction of KL Technology i.e., KL Technology and Sungei Bagan go up and down completely randomly.
Pair Corralation between KL Technology and Sungei Bagan
Assuming the 90 days trading horizon KL Technology is not expected to generate positive returns. However, KL Technology is 2.06 times less risky than Sungei Bagan. It waists most of its returns potential to compensate for thr risk taken. Sungei Bagan is generating about 0.08 per unit of risk. If you would invest 323.00 in Sungei Bagan Rubber on August 27, 2024 and sell it today you would earn a total of 232.00 from holding Sungei Bagan Rubber or generate 71.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.89% |
| Values | Daily Returns |
KL Technology vs. Sungei Bagan Rubber
Performance |
| Timeline |
KL Technology and Sungei Bagan Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Sungei Bagan Rubber
Pair trading matchups for Sungei Bagan
Pair Trading with KL Technology and Sungei Bagan
The main advantage of trading using opposite KL Technology and Sungei Bagan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Sungei Bagan 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 Sungei Bagan will offset losses from the drop in Sungei Bagan's 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 |
| Sungei Bagan vs. Nova Wellness Group | Sungei Bagan vs. Ho Hup Construction | Sungei Bagan vs. PMB Technology Bhd | Sungei Bagan vs. DC HEALTHCARE HOLDINGS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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