Correlation Between ViTrox Bhd and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both ViTrox Bhd and Kossan 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 ViTrox Bhd and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ViTrox Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on ViTrox Bhd and Kossan 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 ViTrox Bhd with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of ViTrox Bhd and Kossan Rubber.
Diversification Opportunities for ViTrox Bhd and Kossan Rubber
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ViTrox and Kossan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ViTrox Bhd and Kossan Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kossan Rubber Industries and ViTrox 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 ViTrox Bhd are associated (or correlated) with Kossan Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kossan Rubber Industries has no effect on the direction of ViTrox Bhd i.e., ViTrox Bhd and Kossan Rubber go up and down completely randomly.
Pair Corralation between ViTrox Bhd and Kossan Rubber
Assuming the 90 days trading horizon ViTrox Bhd is expected to under-perform the Kossan Rubber. But the stock apears to be less risky and, when comparing its historical volatility, ViTrox Bhd is 1.33 times less risky than Kossan Rubber. The stock trades about -0.01 of its potential returns per unit of risk. The Kossan Rubber Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Kossan Rubber Industries on September 2, 2024 and sell it today you would earn a total of 110.00 from holding Kossan Rubber Industries or generate 79.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ViTrox Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| ViTrox Bhd |
| Kossan Rubber Industries |
ViTrox Bhd and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ViTrox Bhd and Kossan Rubber
The main advantage of trading using opposite ViTrox Bhd and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ViTrox Bhd position performs unexpectedly, Kossan 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 Kossan Rubber will offset losses from the drop in Kossan Rubber's long position.| ViTrox Bhd vs. Press Metal Bhd | ViTrox Bhd vs. JF Technology BHD | ViTrox Bhd vs. Senheng New Retail | ViTrox Bhd vs. Cosmos Technology International |
| Kossan Rubber vs. Impiana Hotels Bhd | Kossan Rubber vs. Cengild Medical Berhad | Kossan Rubber vs. EA Technique M | Kossan Rubber vs. Sunzen Biotech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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