Correlation Between Cengild Medical and K One

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

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

Diversification Opportunities for Cengild Medical and K One

0.31

Correlation Coefficient

Cengild Medical  K One

Weak diversification

The 3 months correlation between Cengild and 0111 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad 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 Cengild Medical 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 Cengild Medical Berhad 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 Cengild Medical i.e., Cengild Medical and K One go up and down completely randomly.

Pair Corralation between Cengild Medical and K One

Assuming the 90 days trading horizon Cengild Medical is expected to generate 5.17 times less return on investment than K One. But when comparing it to its historical volatility, Cengild Medical Berhad is 1.94 times less risky than K One. It trades about 0.04 of its potential returns per unit of risk. K One Technology Bhd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  17.00  in K One Technology Bhd on October 6, 2024 and sell it today you would earn a total of  4.00  from holding K One Technology Bhd or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cengild Medical Berhad  vs.  K One Technology Bhd

Cengild Medical Berhad

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cengild Medical Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cengild Medical 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

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in K One Technology Bhd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, K One disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cengild Medical and K One

The main advantage of trading using opposite Cengild Medical and K One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cengild Medical 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 Cengild Medical Berhad 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.