Correlation Between KL Technology and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both KL Technology and KPJ Healthcare 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 KPJ Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and KPJ Healthcare Bhd, you can compare the effects of market volatilities on KL Technology and KPJ Healthcare 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 KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and KPJ Healthcare.
Diversification Opportunities for KL Technology and KPJ Healthcare
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between KLTE and KPJ is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare 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 KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of KL Technology i.e., KL Technology and KPJ Healthcare go up and down completely randomly.
Pair Corralation between KL Technology and KPJ Healthcare
Assuming the 90 days trading horizon KL Technology is expected to under-perform the KPJ Healthcare. But the index apears to be less risky and, when comparing its historical volatility, KL Technology is 1.38 times less risky than KPJ Healthcare. The index trades about -0.39 of its potential returns per unit of risk. The KPJ Healthcare Bhd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 228.00 in KPJ Healthcare Bhd on November 28, 2024 and sell it today you would earn a total of 20.00 from holding KPJ Healthcare Bhd or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
KL Technology vs. KPJ Healthcare Bhd
Performance |
| Timeline |
KL Technology and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
KPJ Healthcare Bhd
Pair trading matchups for KPJ Healthcare
Pair Trading with KL Technology and KPJ Healthcare
The main advantage of trading using opposite KL Technology and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, KPJ Healthcare 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| KL Technology vs. Ho Hup Construction | KL Technology vs. PIE Industrial Bhd | KL Technology vs. Public Packages Holdings | KL Technology vs. RHB Bank Bhd |
| KPJ Healthcare vs. Awanbiru Technology Bhd | KPJ Healthcare vs. Farm Price Holdings | KPJ Healthcare vs. Ho Hup Construction | KPJ Healthcare vs. Diversified Gateway Solutions |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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