Correlation Between AMMB Holdings and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both AMMB Holdings 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 AMMB Holdings and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMMB Holdings Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on AMMB Holdings 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 AMMB Holdings with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMMB Holdings and Kossan Rubber.
Diversification Opportunities for AMMB Holdings and Kossan Rubber
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMMB and Kossan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AMMB Holdings 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 AMMB Holdings 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 AMMB Holdings 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 AMMB Holdings i.e., AMMB Holdings and Kossan Rubber go up and down completely randomly.
Pair Corralation between AMMB Holdings and Kossan Rubber
Assuming the 90 days trading horizon AMMB Holdings is expected to generate 3.19 times less return on investment than Kossan Rubber. But when comparing it to its historical volatility, AMMB Holdings Bhd is 1.34 times less risky than Kossan Rubber. It trades about 0.13 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 215.00 in Kossan Rubber Industries on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Kossan Rubber Industries or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMMB Holdings Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| AMMB Holdings Bhd |
| Kossan Rubber Industries |
AMMB Holdings and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMMB Holdings and Kossan Rubber
The main advantage of trading using opposite AMMB Holdings and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMMB Holdings 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.| AMMB Holdings vs. Petronas Chemicals Group | AMMB Holdings vs. Apollo Food Holdings | AMMB Holdings vs. Kawan Food Bhd | AMMB Holdings vs. Silver Ridge Holdings |
| Kossan Rubber vs. Minetech Resources Bhd | Kossan Rubber vs. Swift Haulage Bhd | Kossan Rubber vs. Insas Bhd | Kossan Rubber vs. Bina Darulaman 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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