Correlation Between Kluang Rubber and Nova Wellness
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Nova Wellness 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 Nova Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Nova Wellness Group, you can compare the effects of market volatilities on Kluang Rubber and Nova Wellness 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 Nova Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Nova Wellness.
Diversification Opportunities for Kluang Rubber and Nova Wellness
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and Nova is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Nova Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Wellness Group 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 Nova Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Wellness Group has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Nova Wellness go up and down completely randomly.
Pair Corralation between Kluang Rubber and Nova Wellness
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.83 times more return on investment than Nova Wellness. However, Kluang Rubber is 1.21 times less risky than Nova Wellness. It trades about 0.19 of its potential returns per unit of risk. Nova Wellness Group is currently generating about -0.29 per unit of risk. If you would invest 568.00 in Kluang Rubber on November 7, 2024 and sell it today you would earn a total of 30.00 from holding Kluang Rubber or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Kluang Rubber vs. Nova Wellness Group
Performance |
| Timeline |
| Kluang Rubber |
| Nova Wellness Group |
Kluang Rubber and Nova Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Nova Wellness
The main advantage of trading using opposite Kluang Rubber and Nova Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Nova Wellness 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 Nova Wellness will offset losses from the drop in Nova Wellness' long position.| Kluang Rubber vs. Eonmetall Group Bhd | Kluang Rubber vs. Ho Hup Construction | Kluang Rubber vs. Kawan Food Bhd | Kluang Rubber vs. PMB Technology Bhd |
| Nova Wellness vs. Magni Tech Industries | Nova Wellness vs. ES Ceramics Technology | Nova Wellness vs. Eonmetall Group Bhd | Nova Wellness vs. British American Tobacco |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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