Correlation Between Resintech Bhd and Kumpulan Kitacon

Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and Kumpulan Kitacon 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 Resintech Bhd and Kumpulan Kitacon into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Resintech Bhd and Kumpulan Kitacon

0.21

Correlation Coefficient

Resintech Bhd  Kumpulan Kitacon

Modest diversification

The 3 months correlation between Resintech and Kumpulan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and Kumpulan Kitacon Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumpulan Kitacon Berhad and Resintech Bhd 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 Resintech Bhd are associated (or correlated) with Kumpulan Kitacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumpulan Kitacon Berhad has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and Kumpulan Kitacon go up and down completely randomly.

Pair Corralation between Resintech Bhd and Kumpulan Kitacon

Assuming the 90 days trading horizon Resintech Bhd is expected to generate 1.2 times more return on investment than Kumpulan Kitacon. However, Resintech Bhd is 1.2 times more volatile than Kumpulan Kitacon Berhad. It trades about 0.1 of its potential returns per unit of risk. Kumpulan Kitacon Berhad is currently generating about 0.02 per unit of risk. If you would invest  60.00  in Resintech Bhd on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Resintech Bhd or generate 11.67% return on investment over 90 days.

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

Resintech Bhd  vs.  Kumpulan Kitacon Berhad

Resintech Bhd

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Resintech Bhd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Resintech Bhd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kumpulan Kitacon Berhad

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kumpulan Kitacon Berhad are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Kumpulan Kitacon 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 Resintech Bhd and Kumpulan Kitacon

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

The idea behind Resintech Bhd and Kumpulan Kitacon Berhad 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.