Correlation Between KL Technology and Press Metal
Can any of the company-specific risk be diversified away by investing in both KL Technology and Press Metal 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 Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KL Technology and Press Metal Bhd, you can compare the effects of market volatilities on KL Technology and Press Metal 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 Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of KL Technology and Press Metal.
Diversification Opportunities for KL Technology and Press Metal
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLTE and Press is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KL Technology and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal 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 Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of KL Technology i.e., KL Technology and Press Metal go up and down completely randomly.
Pair Corralation between KL Technology and Press Metal
Assuming the 90 days trading horizon KL Technology is expected to generate 0.7 times more return on investment than Press Metal. However, KL Technology is 1.42 times less risky than Press Metal. It trades about 0.0 of its potential returns per unit of risk. Press Metal Bhd is currently generating about -0.08 per unit of risk. If you would invest 5,883 in KL Technology on August 31, 2024 and sell it today you would lose (10.00) from holding KL Technology or give up 0.17% 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. Press Metal Bhd
Performance |
| Timeline |
KL Technology and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
KL Technology
Pair trading matchups for KL Technology
Press Metal Bhd
Pair trading matchups for Press Metal
Pair Trading with KL Technology and Press Metal
The main advantage of trading using opposite KL Technology and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KL Technology position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.| KL Technology vs. Resintech Bhd | KL Technology vs. Aurelius Technologies Bhd | KL Technology vs. Cloudpoint Technology Berhad | KL Technology vs. Choo Bee Metal |
| Press Metal vs. PMB Technology Bhd | Press Metal vs. Pantech Group Holdings | Press Metal vs. CSC Steel Holdings | Press Metal vs. Coraza Integrated Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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