Correlation Between KL Technology and OSK Holdings
Can any of the company-specific risk be diversified away by investing in both KL Technology and OSK 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 OSK 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 OSK Holdings Bhd, you can compare the effects of market volatilities on KL Technology and OSK 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 OSK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and OSK Holdings.
Diversification Opportunities for KL Technology and OSK Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLTE and OSK is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and OSK Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSK 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 OSK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSK Holdings Bhd has no effect on the direction of KL Technology i.e., KL Technology and OSK Holdings go up and down completely randomly.
Pair Corralation between KL Technology and OSK Holdings
Assuming the 90 days trading horizon KL Technology is expected to generate 1.5 times less return on investment than OSK Holdings. In addition to that, KL Technology is 2.82 times more volatile than OSK Holdings Bhd. It trades about 0.06 of its total potential returns per unit of risk. OSK Holdings Bhd is currently generating about 0.25 per unit of volatility. If you would invest 157.00 in OSK Holdings Bhd on September 4, 2024 and sell it today you would earn a total of 5.00 from holding OSK Holdings Bhd or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KL Technology vs. OSK Holdings Bhd
Performance |
| Timeline |
KL Technology and OSK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
OSK Holdings Bhd
Pair trading matchups for OSK Holdings
Pair Trading with KL Technology and OSK Holdings
The main advantage of trading using opposite KL Technology and OSK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, OSK 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 OSK Holdings will offset losses from the drop in OSK Holdings' long position.| KL Technology vs. ES Ceramics Technology | KL Technology vs. Sungei Bagan Rubber | KL Technology vs. Daya Materials Bhd | KL Technology vs. Greatech Technology Bhd |
| OSK Holdings vs. Minetech Resources Bhd | OSK Holdings vs. Swift Haulage Bhd | OSK Holdings vs. Insas Bhd | OSK Holdings vs. Bina Darulaman 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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