Correlation Between Keck Seng and QL Resources
Can any of the company-specific risk be diversified away by investing in both Keck Seng and QL Resources 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 Keck Seng and QL Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Malaysia and QL Resources Bhd, you can compare the effects of market volatilities on Keck Seng and QL Resources 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 Keck Seng with a short position of QL Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and QL Resources.
Diversification Opportunities for Keck Seng and QL Resources
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Keck and 7084 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Malaysia and QL Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QL Resources Bhd and Keck Seng 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 Keck Seng Malaysia are associated (or correlated) with QL Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QL Resources Bhd has no effect on the direction of Keck Seng i.e., Keck Seng and QL Resources go up and down completely randomly.
Pair Corralation between Keck Seng and QL Resources
Assuming the 90 days trading horizon Keck Seng Malaysia is expected to under-perform the QL Resources. But the stock apears to be less risky and, when comparing its historical volatility, Keck Seng Malaysia is 1.25 times less risky than QL Resources. The stock trades about -0.1 of its potential returns per unit of risk. The QL Resources Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 460.00 in QL Resources Bhd on September 24, 2024 and sell it today you would earn a total of 17.00 from holding QL Resources Bhd or generate 3.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Keck Seng Malaysia vs. QL Resources Bhd
Performance |
Timeline |
Keck Seng Malaysia |
QL Resources Bhd |
Keck Seng and QL Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Keck Seng and QL Resources
The main advantage of trading using opposite Keck Seng and QL Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, QL Resources 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 QL Resources will offset losses from the drop in QL Resources' long position.The idea behind Keck Seng Malaysia and QL Resources 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.QL Resources vs. Kuala Lumpur Kepong | QL Resources vs. Keck Seng Malaysia | QL Resources vs. Saudee Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |