Correlation Between KL Technology and Top Glove
Can any of the company-specific risk be diversified away by investing in both KL Technology and Top Glove 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 Top Glove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Top Glove, you can compare the effects of market volatilities on KL Technology and Top Glove 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 Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Top Glove.
Diversification Opportunities for KL Technology and Top Glove
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLTE and Top is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove 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 Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of KL Technology i.e., KL Technology and Top Glove go up and down completely randomly.
Pair Corralation between KL Technology and Top Glove
Assuming the 90 days trading horizon KL Technology is expected to under-perform the Top Glove. But the index apears to be less risky and, when comparing its historical volatility, KL Technology is 2.58 times less risky than Top Glove. The index trades about -0.05 of its potential returns per unit of risk. The Top Glove is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Top Glove on September 3, 2024 and sell it today you would earn a total of 26.00 from holding Top Glove or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. Top Glove
Performance |
| Timeline |
KL Technology and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Top Glove
Pair trading matchups for Top Glove
Pair Trading with KL Technology and Top Glove
The main advantage of trading using opposite KL Technology and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| KL Technology vs. Computer Forms Bhd | KL Technology vs. Lyc Healthcare Bhd | KL Technology vs. Senheng New Retail | KL Technology vs. Uchi Technologies Bhd |
| Top Glove vs. Malaysia Steel Works | Top Glove vs. Media Prima Bhd | Top Glove vs. Leader Steel Holdings | Top Glove vs. Hong Leong Bank |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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