Correlation Between KL Technology and Computer Forms
Can any of the company-specific risk be diversified away by investing in both KL Technology and Computer Forms 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 Computer Forms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Computer Forms Bhd, you can compare the effects of market volatilities on KL Technology and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Computer Forms.
Diversification Opportunities for KL Technology and Computer Forms
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLTE and Computer is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of KL Technology i.e., KL Technology and Computer Forms go up and down completely randomly.
Pair Corralation between KL Technology and Computer Forms
Assuming the 90 days trading horizon KL Technology is expected to generate 0.5 times more return on investment than Computer Forms. However, KL Technology is 1.98 times less risky than Computer Forms. It trades about -0.01 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.1 per unit of risk. If you would invest 5,951 in KL Technology on August 25, 2024 and sell it today you would lose (35.00) from holding KL Technology or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KL Technology vs. Computer Forms Bhd
Performance |
| Timeline |
KL Technology and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Computer Forms Bhd
Pair trading matchups for Computer Forms
Pair Trading with KL Technology and Computer Forms
The main advantage of trading using opposite KL Technology and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| KL Technology vs. MyTech Group Bhd | KL Technology vs. Supercomnet Technologies Bhd | KL Technology vs. Sunzen Biotech Bhd | KL Technology vs. Duopharma Biotech Bhd |
| Computer Forms vs. Tex Cycle Technology | Computer Forms vs. Digistar Bhd | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. OpenSys M 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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