Correlation Between KL Technology and MI Technovation
Can any of the company-specific risk be diversified away by investing in both KL Technology and MI Technovation 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 MI Technovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and MI Technovation Bhd, you can compare the effects of market volatilities on KL Technology and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and MI Technovation.
Diversification Opportunities for KL Technology and MI Technovation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KLTE and 5286 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of KL Technology i.e., KL Technology and MI Technovation go up and down completely randomly.
Pair Corralation between KL Technology and MI Technovation
Assuming the 90 days trading horizon KL Technology is expected to under-perform the MI Technovation. But the index apears to be less risky and, when comparing its historical volatility, KL Technology is 2.41 times less risky than MI Technovation. The index trades about -0.01 of its potential returns per unit of risk. The MI Technovation Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 141.00 in MI Technovation Bhd on August 30, 2024 and sell it today you would earn a total of 68.00 from holding MI Technovation Bhd or generate 48.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KL Technology vs. MI Technovation Bhd
Performance |
| Timeline |
KL Technology and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
MI Technovation Bhd
Pair trading matchups for MI Technovation
Pair Trading with KL Technology and MI Technovation
The main advantage of trading using opposite KL Technology and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| KL Technology vs. Radiant Globaltech Bhd | KL Technology vs. Supercomnet Technologies Bhd | KL Technology vs. Resintech Bhd | KL Technology vs. Dataprep Holdings Bhd |
| MI Technovation vs. Minetech Resources Bhd | MI Technovation vs. Sunzen Biotech Bhd | MI Technovation vs. Hengyuan Refining | MI Technovation vs. Impiana Hotels 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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