Correlation Between Daya Materials and K One

Can any of the company-specific risk be diversified away by investing in both Daya Materials and K One 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 Daya Materials and K One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daya Materials Bhd and K One Technology Bhd, you can compare the effects of market volatilities on Daya Materials and K One 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 Daya Materials with a short position of K One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and K One.

Diversification Opportunities for Daya Materials and K One

0.06

Correlation Coefficient

Daya Materials  K One

Significant diversification

The 3 months correlation between Daya and 0111 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials Bhd and K One Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K One Technology and Daya Materials 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 Daya Materials Bhd are associated (or correlated) with K One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K One Technology has no effect on the direction of Daya Materials i.e., Daya Materials and K One go up and down completely randomly.

Pair Corralation between Daya Materials and K One

Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the K One. But the stock apears to be less risky and, when comparing its historical volatility, Daya Materials Bhd is 1.36 times less risky than K One. The stock trades about -0.11 of its potential returns per unit of risk. The K One Technology Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17.00  in K One Technology Bhd on September 3, 2024 and sell it today you would earn a total of  0.00  from holding K One Technology Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Daya Materials Bhd  vs.  K One Technology Bhd

Daya Materials Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daya Materials Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Daya Materials is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

K One Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K One Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, K One is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Daya Materials and K One

The main advantage of trading using opposite Daya Materials and K One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials position performs unexpectedly, K One 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 K One will offset losses from the drop in K One's long position.

The idea behind Daya Materials Bhd and K One Technology Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.