Correlation Between Kluang Rubber and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and ES Ceramics 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 ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and ES Ceramics Technology, you can compare the effects of market volatilities on Kluang Rubber and ES Ceramics 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 ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and ES Ceramics.
Diversification Opportunities for Kluang Rubber and ES Ceramics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and 0100 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology 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 ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and ES Ceramics go up and down completely randomly.
Pair Corralation between Kluang Rubber and ES Ceramics
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.14 times more return on investment than ES Ceramics. However, Kluang Rubber is 7.12 times less risky than ES Ceramics. It trades about 0.04 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.07 per unit of risk. If you would invest 570.00 in Kluang Rubber on October 18, 2024 and sell it today you would earn a total of 2.00 from holding Kluang Rubber or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. ES Ceramics Technology
Performance |
| Timeline |
| Kluang Rubber |
| ES Ceramics Technology |
Kluang Rubber and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and ES Ceramics
The main advantage of trading using opposite Kluang Rubber and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Kluang Rubber vs. Press Metal Bhd | Kluang Rubber vs. Binasat Communications Bhd | Kluang Rubber vs. Melewar Industrial Group | Kluang Rubber vs. YX Precious Metals |
| ES Ceramics vs. Bank Islam Malaysia | ES Ceramics vs. Dataprep Holdings Bhd | ES Ceramics vs. Riverview Rubber Estates | ES Ceramics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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