Correlation Between KL Technology and Petronas Gas
Can any of the company-specific risk be diversified away by investing in both KL Technology and Petronas Gas 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 Petronas Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Petronas Gas Bhd, you can compare the effects of market volatilities on KL Technology and Petronas Gas 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 Petronas Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Petronas Gas.
Diversification Opportunities for KL Technology and Petronas Gas
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLTE and Petronas is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Petronas Gas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Gas 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 Petronas Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Gas Bhd has no effect on the direction of KL Technology i.e., KL Technology and Petronas Gas go up and down completely randomly.
Pair Corralation between KL Technology and Petronas Gas
Assuming the 90 days trading horizon KL Technology is expected to under-perform the Petronas Gas. In addition to that, KL Technology is 2.05 times more volatile than Petronas Gas Bhd. It trades about 0.0 of its total potential returns per unit of risk. Petronas Gas Bhd is currently generating about 0.03 per unit of volatility. If you would invest 1,722 in Petronas Gas Bhd on August 28, 2024 and sell it today you would earn a total of 58.00 from holding Petronas Gas Bhd or generate 3.37% 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. Petronas Gas Bhd
Performance |
| Timeline |
KL Technology and Petronas Gas Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Petronas Gas Bhd
Pair trading matchups for Petronas Gas
Pair Trading with KL Technology and Petronas Gas
The main advantage of trading using opposite KL Technology and Petronas Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Petronas Gas 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 Petronas Gas will offset losses from the drop in Petronas Gas' long position.| KL Technology vs. Rubberex M | KL Technology vs. Senheng New Retail | KL Technology vs. Uchi Technologies Bhd | KL Technology vs. Duopharma Biotech Bhd |
| Petronas Gas vs. Eversafe Rubber Bhd | Petronas Gas vs. BP Plastics Holding | Petronas Gas vs. Daya Materials Bhd | Petronas Gas vs. Press Metal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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