Correlation Between KL Technology and Lotus KFM
Can any of the company-specific risk be diversified away by investing in both KL Technology and Lotus KFM 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 Lotus KFM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Lotus KFM Bhd, you can compare the effects of market volatilities on KL Technology and Lotus KFM 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 Lotus KFM. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Lotus KFM.
Diversification Opportunities for KL Technology and Lotus KFM
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLTE and Lotus is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Lotus KFM Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus KFM 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 Lotus KFM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus KFM Bhd has no effect on the direction of KL Technology i.e., KL Technology and Lotus KFM go up and down completely randomly.
Pair Corralation between KL Technology and Lotus KFM
Assuming the 90 days trading horizon KL Technology is expected to under-perform the Lotus KFM. But the index apears to be less risky and, when comparing its historical volatility, KL Technology is 3.56 times less risky than Lotus KFM. The index trades about 0.0 of its potential returns per unit of risk. The Lotus KFM Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Lotus KFM Bhd on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Lotus KFM Bhd or generate 0.0% 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. Lotus KFM Bhd
Performance |
| Timeline |
KL Technology and Lotus KFM Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Lotus KFM Bhd
Pair trading matchups for Lotus KFM
Pair Trading with KL Technology and Lotus KFM
The main advantage of trading using opposite KL Technology and Lotus KFM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Lotus KFM 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 Lotus KFM will offset losses from the drop in Lotus KFM's long position.| KL Technology vs. Awanbiru Technology Bhd | KL Technology vs. Media Prima Bhd | KL Technology vs. Tex Cycle Technology | KL Technology vs. Carlsberg Brewery Malaysia |
| Lotus KFM vs. Duopharma Biotech Bhd | Lotus KFM vs. Pantech Group Holdings | Lotus KFM vs. Kobay Tech Bhd | Lotus KFM vs. Greatech Technology 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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