Correlation Between KPJ Healthcare and Uchi Technologies

Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare and Uchi Technologies 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 KPJ Healthcare and Uchi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KPJ Healthcare Bhd and Uchi Technologies Bhd, you can compare the effects of market volatilities on KPJ Healthcare and Uchi Technologies 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 KPJ Healthcare with a short position of Uchi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and Uchi Technologies.

Diversification Opportunities for KPJ Healthcare and Uchi Technologies

0.26

Correlation Coefficient

KPJ Healthcare  Uchi Technologies

Modest diversification

The 3 months correlation between KPJ and Uchi is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare Bhd and Uchi Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uchi Technologies Bhd and KPJ Healthcare 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 KPJ Healthcare Bhd are associated (or correlated) with Uchi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uchi Technologies Bhd has no effect on the direction of KPJ Healthcare i.e., KPJ Healthcare and Uchi Technologies go up and down completely randomly.

Pair Corralation between KPJ Healthcare and Uchi Technologies

Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 2.5 times more return on investment than Uchi Technologies. However, KPJ Healthcare is 2.5 times more volatile than Uchi Technologies Bhd. It trades about 0.01 of its potential returns per unit of risk. Uchi Technologies Bhd is currently generating about -0.03 per unit of risk. If you would invest  248.00  in KPJ Healthcare Bhd on November 29, 2024 and sell it today you would earn a total of  0.00  from holding KPJ Healthcare Bhd or generate 0.0% return on investment over 90 days.

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

KPJ Healthcare Bhd  vs.  Uchi Technologies Bhd

KPJ Healthcare Bhd

Risk-Adjusted Performance

Very Weak

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

Uchi Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uchi Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Uchi Technologies 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 KPJ Healthcare and Uchi Technologies

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

The idea behind KPJ Healthcare Bhd and Uchi Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.