Correlation Between MClean Technologies and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both MClean Technologies 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 MClean Technologies and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MClean Technologies Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on MClean Technologies 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 MClean Technologies with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Kossan Rubber.
Diversification Opportunities for MClean Technologies and Kossan Rubber
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MClean and Kossan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies 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 MClean Technologies 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 MClean Technologies 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 MClean Technologies i.e., MClean Technologies and Kossan Rubber go up and down completely randomly.
Pair Corralation between MClean Technologies and Kossan Rubber
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to generate 0.66 times more return on investment than Kossan Rubber. However, MClean Technologies Bhd is 1.53 times less risky than Kossan Rubber. It trades about 0.01 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about -0.19 per unit of risk. If you would invest 29.00 in MClean Technologies Bhd on November 28, 2024 and sell it today you would earn a total of 0.00 from holding MClean Technologies Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| MClean Technologies Bhd |
| Kossan Rubber Industries |
MClean Technologies and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Kossan Rubber
The main advantage of trading using opposite MClean Technologies and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies 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.| MClean Technologies vs. Sunway Construction Group | MClean Technologies vs. DC HEALTHCARE HOLDINGS | MClean Technologies vs. Sports Toto Berhad | MClean Technologies vs. TAS Offshore Bhd |
| Kossan Rubber vs. Ho Hup Construction | Kossan Rubber vs. Farm Price Holdings | Kossan Rubber vs. Petronas Chemicals Group | Kossan Rubber vs. Sports Toto 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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