Correlation Between KL Technology and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both KL Technology and Icon Offshore 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 Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Icon Offshore Bhd, you can compare the effects of market volatilities on KL Technology and Icon Offshore 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 Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Icon Offshore.
Diversification Opportunities for KL Technology and Icon Offshore
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KLTE and Icon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Icon Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Offshore 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 Icon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Offshore Bhd has no effect on the direction of KL Technology i.e., KL Technology and Icon Offshore go up and down completely randomly.
Pair Corralation between KL Technology and Icon Offshore
Assuming the 90 days trading horizon KL Technology is expected to generate 274.71 times less return on investment than Icon Offshore. But when comparing it to its historical volatility, KL Technology is 3.66 times less risky than Icon Offshore. It trades about 0.0 of its potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Icon Offshore Bhd on August 31, 2024 and sell it today you would earn a total of 70.00 from holding Icon Offshore Bhd or generate 189.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. Icon Offshore Bhd
Performance |
| Timeline |
KL Technology and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Icon Offshore Bhd
Pair trading matchups for Icon Offshore
Pair Trading with KL Technology and Icon Offshore
The main advantage of trading using opposite KL Technology and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Icon Offshore 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 Icon Offshore will offset losses from the drop in Icon Offshore'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 |
| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Digistar Bhd | Icon Offshore vs. Minetech Resources Bhd | Icon Offshore vs. Swift Haulage 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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