Correlation Between Daya Materials and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both Daya Materials and Kluang Rubber 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 Daya Materials and Kluang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daya Materials Bhd and Kluang Rubber, you can compare the effects of market volatilities on Daya Materials and Kluang Rubber 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 Daya Materials with a short position of Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and Kluang Rubber.
Diversification Opportunities for Daya Materials and Kluang Rubber
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daya and Kluang is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials Bhd and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber and Daya Materials 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 Daya Materials Bhd are associated (or correlated) with Kluang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kluang Rubber has no effect on the direction of Daya Materials i.e., Daya Materials and Kluang Rubber go up and down completely randomly.
Pair Corralation between Daya Materials and Kluang Rubber
Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the Kluang Rubber. In addition to that, Daya Materials is 2.76 times more volatile than Kluang Rubber. It trades about -0.08 of its total potential returns per unit of risk. Kluang Rubber is currently generating about -0.07 per unit of volatility. If you would invest 571.00 in Kluang Rubber on August 31, 2024 and sell it today you would lose (14.00) from holding Kluang Rubber or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daya Materials Bhd vs. Kluang Rubber
Performance |
| Timeline |
| Daya Materials Bhd |
| Kluang Rubber |
Daya Materials and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and Kluang Rubber
The main advantage of trading using opposite Daya Materials and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials position performs unexpectedly, Kluang Rubber 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 Kluang Rubber will offset losses from the drop in Kluang Rubber's long position.| Daya Materials vs. Icon Offshore Bhd | Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd |
| Kluang Rubber vs. Icon Offshore Bhd | Kluang Rubber vs. Press Metal Bhd | Kluang Rubber vs. Cosmos Technology International | Kluang Rubber vs. CPE Technology Berhad |
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 Stocks Directory module to find actively traded stocks across global markets.
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