Correlation Between Kobay Tech and Ta Ann

Can any of the company-specific risk be diversified away by investing in both Kobay Tech and Ta Ann 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 Kobay Tech and Ta Ann into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kobay Tech Bhd and Ta Ann Holdings, you can compare the effects of market volatilities on Kobay Tech and Ta Ann 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 Kobay Tech with a short position of Ta Ann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and Ta Ann.

Diversification Opportunities for Kobay Tech and Ta Ann

-0.33

Correlation Coefficient

Kobay Tech  Ta Ann

Very good diversification

The 3 months correlation between Kobay and 5012 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and Ta Ann Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ann Holdings and Kobay Tech 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 Kobay Tech Bhd are associated (or correlated) with Ta Ann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ann Holdings has no effect on the direction of Kobay Tech i.e., Kobay Tech and Ta Ann go up and down completely randomly.

Pair Corralation between Kobay Tech and Ta Ann

Assuming the 90 days trading horizon Kobay Tech is expected to generate 2.12 times less return on investment than Ta Ann. In addition to that, Kobay Tech is 2.07 times more volatile than Ta Ann Holdings. It trades about 0.03 of its total potential returns per unit of risk. Ta Ann Holdings is currently generating about 0.14 per unit of volatility. If you would invest  371.00  in Ta Ann Holdings on September 16, 2024 and sell it today you would earn a total of  52.00  from holding Ta Ann Holdings or generate 14.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kobay Tech Bhd  vs.  Ta Ann Holdings

Kobay Tech Bhd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kobay Tech Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Kobay Tech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ta Ann Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ta Ann Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Ta Ann disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kobay Tech and Ta Ann

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

The idea behind Kobay Tech Bhd and Ta Ann Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.