Correlation Between ES Ceramics and Rubberex M
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Rubberex M 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 Rubberex M 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 Rubberex M, you can compare the effects of market volatilities on ES Ceramics and Rubberex M 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 Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Rubberex M.
Diversification Opportunities for ES Ceramics and Rubberex M
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0100 and Rubberex is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M 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 Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of ES Ceramics i.e., ES Ceramics and Rubberex M go up and down completely randomly.
Pair Corralation between ES Ceramics and Rubberex M
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Rubberex M. In addition to that, ES Ceramics is 1.63 times more volatile than Rubberex M. It trades about -0.14 of its total potential returns per unit of risk. Rubberex M is currently generating about -0.09 per unit of volatility. If you would invest 17.00 in Rubberex M on November 28, 2024 and sell it today you would lose (1.00) from holding Rubberex M or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Rubberex M
Performance |
| Timeline |
| ES Ceramics Technology |
| Rubberex M |
ES Ceramics and Rubberex M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Rubberex M
The main advantage of trading using opposite ES Ceramics and Rubberex M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Rubberex M 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 Rubberex M will offset losses from the drop in Rubberex M's long position.| ES Ceramics vs. Press Metal Bhd | ES Ceramics vs. Carlsberg Brewery Malaysia | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Ho Hup Construction |
| Rubberex M vs. Kluang Rubber | Rubberex M vs. FARM FRESH BERHAD | Rubberex M vs. Farm Price Holdings | Rubberex M vs. Homeritz 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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