Correlation Between PIE Industrial and KL Technology
Can any of the company-specific risk be diversified away by investing in both PIE Industrial and KL Technology 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 PIE Industrial and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and KL Technology, you can compare the effects of market volatilities on PIE Industrial and KL Technology 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 PIE Industrial with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and KL Technology.
Diversification Opportunities for PIE Industrial and KL Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIE and KLTE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and PIE Industrial 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 PIE Industrial Bhd are associated (or correlated) with KL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KL Technology has no effect on the direction of PIE Industrial i.e., PIE Industrial and KL Technology go up and down completely randomly.
Pair Corralation between PIE Industrial and KL Technology
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to generate 1.36 times more return on investment than KL Technology. However, PIE Industrial is 1.36 times more volatile than KL Technology. It trades about 0.0 of its potential returns per unit of risk. KL Technology is currently generating about -0.1 per unit of risk. If you would invest 579.00 in PIE Industrial Bhd on October 22, 2024 and sell it today you would lose (16.00) from holding PIE Industrial Bhd or give up 2.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PIE Industrial Bhd vs. KL Technology
Performance |
Timeline |
PIE Industrial and KL Technology Volatility Contrast
Predicted Return Density |
Returns |
PIE Industrial Bhd
Pair trading matchups for PIE Industrial
KL Technology
Pair trading matchups for KL Technology
Pair Trading with PIE Industrial and KL Technology
The main advantage of trading using opposite PIE Industrial and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial position performs unexpectedly, KL Technology 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 KL Technology will offset losses from the drop in KL Technology's long position.PIE Industrial vs. Greatech Technology Bhd | PIE Industrial vs. Pantech Group Holdings | PIE Industrial vs. Cloudpoint Technology Berhad | PIE Industrial vs. Impiana Hotels Bhd |
KL Technology vs. Computer Forms Bhd | KL Technology vs. Choo Bee Metal | KL Technology vs. Greatech Technology Bhd | KL Technology vs. Southern Steel Bhd |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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