Correlation Between Kluang Rubber and ViTrox Bhd
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and ViTrox Bhd 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 Kluang Rubber and ViTrox Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and ViTrox Bhd, you can compare the effects of market volatilities on Kluang Rubber and ViTrox Bhd 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 Kluang Rubber with a short position of ViTrox Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and ViTrox Bhd.
Diversification Opportunities for Kluang Rubber and ViTrox Bhd
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kluang and ViTrox is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and ViTrox Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViTrox Bhd and Kluang Rubber 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 Kluang Rubber are associated (or correlated) with ViTrox Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViTrox Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and ViTrox Bhd go up and down completely randomly.
Pair Corralation between Kluang Rubber and ViTrox Bhd
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 1.02 times more return on investment than ViTrox Bhd. However, Kluang Rubber is 1.02 times more volatile than ViTrox Bhd. It trades about 0.06 of its potential returns per unit of risk. ViTrox Bhd is currently generating about -0.01 per unit of risk. If you would invest 395.00 in Kluang Rubber on September 4, 2024 and sell it today you would earn a total of 189.00 from holding Kluang Rubber or generate 47.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.88% |
| Values | Daily Returns |
Kluang Rubber vs. ViTrox Bhd
Performance |
| Timeline |
| Kluang Rubber |
| ViTrox Bhd |
Kluang Rubber and ViTrox Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and ViTrox Bhd
The main advantage of trading using opposite Kluang Rubber and ViTrox Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, ViTrox Bhd 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 ViTrox Bhd will offset losses from the drop in ViTrox Bhd's long position.| Kluang Rubber vs. Aurelius Technologies Bhd | Kluang Rubber vs. Sungei Bagan Rubber | Kluang Rubber vs. MClean Technologies Bhd | Kluang Rubber vs. Eversafe Rubber Bhd |
| ViTrox Bhd vs. Eversafe Rubber Bhd | ViTrox Bhd vs. Computer Forms Bhd | ViTrox Bhd vs. Leader Steel Holdings | ViTrox Bhd vs. Kluang Rubber |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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