Correlation Between YX Precious and K One

Can any of the company-specific risk be diversified away by investing in both YX Precious and K One 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 YX Precious and K One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YX Precious Metals and K One Technology Bhd, you can compare the effects of market volatilities on YX Precious and K One 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 YX Precious with a short position of K One. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and K One.

Diversification Opportunities for YX Precious and K One

0.12

Correlation Coefficient

YX Precious  K One

Average diversification

The 3 months correlation between 0250 and 0111 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals and K One Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K One Technology and YX Precious 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 YX Precious Metals are associated (or correlated) with K One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K One Technology has no effect on the direction of YX Precious i.e., YX Precious and K One go up and down completely randomly.

Pair Corralation between YX Precious and K One

Assuming the 90 days trading horizon YX Precious Metals is expected to under-perform the K One. But the stock apears to be less risky and, when comparing its historical volatility, YX Precious Metals is 1.94 times less risky than K One. The stock trades about -0.07 of its potential returns per unit of risk. The K One Technology Bhd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  19.00  in K One Technology Bhd on September 14, 2024 and sell it today you would lose (1.00) from holding K One Technology Bhd or give up 5.26% of portfolio value over 90 days.

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

YX Precious Metals  vs.  K One Technology Bhd

YX Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YX Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

K One Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K One Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, K One 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 YX Precious and K One

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

The idea behind YX Precious Metals and K One Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.