Correlation Between Kluang Rubber and Media Prima
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Media Prima 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 Media Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Media Prima Bhd, you can compare the effects of market volatilities on Kluang Rubber and Media Prima 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 Media Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Media Prima.
Diversification Opportunities for Kluang Rubber and Media Prima
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and Media is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Media Prima Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Prima 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 Media Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Prima Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Media Prima go up and down completely randomly.
Pair Corralation between Kluang Rubber and Media Prima
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.82 times more return on investment than Media Prima. However, Kluang Rubber is 1.22 times less risky than Media Prima. It trades about 0.07 of its potential returns per unit of risk. Media Prima Bhd is currently generating about 0.03 per unit of risk. If you would invest 374.00 in Kluang Rubber on August 31, 2024 and sell it today you would earn a total of 183.00 from holding Kluang Rubber or generate 48.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.09% |
| Values | Daily Returns |
Kluang Rubber vs. Media Prima Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Media Prima Bhd |
Kluang Rubber and Media Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Media Prima
The main advantage of trading using opposite Kluang Rubber and Media Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Media Prima 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 Media Prima will offset losses from the drop in Media Prima's long position.| Kluang Rubber vs. Icon Offshore Bhd | Kluang Rubber vs. Press Metal Bhd | Kluang Rubber vs. Cosmos Technology International | Kluang Rubber vs. CPE Technology Berhad |
| Media Prima vs. Binasat Communications Bhd | Media Prima vs. Petronas Chemicals Group | Media Prima vs. Shangri La Hotels | Media Prima vs. Lotte Chemical Titan |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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