Correlation Between ES Ceramics and Kobay Tech
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Kobay Tech 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 ES Ceramics and Kobay Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Kobay Tech Bhd, you can compare the effects of market volatilities on ES Ceramics and Kobay Tech 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 ES Ceramics with a short position of Kobay Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Kobay Tech.
Diversification Opportunities for ES Ceramics and Kobay Tech
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0100 and Kobay is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Kobay Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kobay Tech Bhd and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Kobay Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kobay Tech Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and Kobay Tech go up and down completely randomly.
Pair Corralation between ES Ceramics and Kobay Tech
Assuming the 90 days trading horizon ES Ceramics Technology is expected to generate 1.16 times more return on investment than Kobay Tech. However, ES Ceramics is 1.16 times more volatile than Kobay Tech Bhd. It trades about -0.01 of its potential returns per unit of risk. Kobay Tech Bhd is currently generating about -0.03 per unit of risk. If you would invest 22.00 in ES Ceramics Technology on September 4, 2024 and sell it today you would lose (8.00) from holding ES Ceramics Technology or give up 36.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Kobay Tech Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| Kobay Tech Bhd |
ES Ceramics and Kobay Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Kobay Tech
The main advantage of trading using opposite ES Ceramics and Kobay Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Kobay Tech 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 Kobay Tech will offset losses from the drop in Kobay Tech's long position.| ES Ceramics vs. Minetech Resources Bhd | ES Ceramics vs. Swift Haulage Bhd | ES Ceramics vs. Insas Bhd | ES Ceramics vs. Bina Darulaman Bhd |
| Kobay Tech vs. MClean Technologies Bhd | Kobay Tech vs. TAS Offshore Bhd | Kobay Tech vs. ES Ceramics Technology | Kobay Tech vs. Senheng New Retail |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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