Correlation Between IBEX 35 and KL Technology
Can any of the company-specific risk be diversified away by investing in both IBEX 35 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 IBEX 35 and KL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX 35 Index and KL Technology, you can compare the effects of market volatilities on IBEX 35 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 IBEX 35 with a short position of KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and KL Technology.
Diversification Opportunities for IBEX 35 and KL Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IBEX and KLTE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology and IBEX 35 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 IBEX 35 Index 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 IBEX 35 i.e., IBEX 35 and KL Technology go up and down completely randomly.
Pair Corralation between IBEX 35 and KL Technology
Assuming the 90 days trading horizon IBEX 35 Index is expected to generate 0.5 times more return on investment than KL Technology. However, IBEX 35 Index is 1.99 times less risky than KL Technology. It trades about 0.02 of its potential returns per unit of risk. KL Technology is currently generating about -0.1 per unit of risk. If you would invest 1,139,720 in IBEX 35 Index on September 1, 2024 and sell it today you would earn a total of 24,410 from holding IBEX 35 Index or generate 2.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.15% |
Values | Daily Returns |
IBEX 35 Index vs. KL Technology
Performance |
Timeline |
IBEX 35 and KL Technology Volatility Contrast
Predicted Return Density |
Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
KL Technology
Pair trading matchups for KL Technology
Pair Trading with IBEX 35 and KL Technology
The main advantage of trading using opposite IBEX 35 and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 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.IBEX 35 vs. All Iron Re | IBEX 35 vs. Tier1 Technology SA | IBEX 35 vs. Cellnex Telecom SA | IBEX 35 vs. Ebro Foods |
KL Technology vs. Computer Forms Bhd | KL Technology vs. Press Metal Bhd | KL Technology vs. Riverview Rubber Estates | KL Technology vs. Aurelius Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |