Correlation Between Kluang Rubber and Mycron Steel
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Mycron Steel 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 Mycron Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Mycron Steel Bhd, you can compare the effects of market volatilities on Kluang Rubber and Mycron Steel 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 Mycron Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Mycron Steel.
Diversification Opportunities for Kluang Rubber and Mycron Steel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kluang and Mycron is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Mycron Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycron Steel 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 Mycron Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycron Steel Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Mycron Steel go up and down completely randomly.
Pair Corralation between Kluang Rubber and Mycron Steel
Assuming the 90 days trading horizon Kluang Rubber is expected to under-perform the Mycron Steel. But the stock apears to be less risky and, when comparing its historical volatility, Kluang Rubber is 3.46 times less risky than Mycron Steel. The stock trades about -0.04 of its potential returns per unit of risk. The Mycron Steel Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Mycron Steel Bhd on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Mycron Steel Bhd or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. Mycron Steel Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Mycron Steel Bhd |
Kluang Rubber and Mycron Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Mycron Steel
The main advantage of trading using opposite Kluang Rubber and Mycron Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Mycron Steel 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 Mycron Steel will offset losses from the drop in Mycron Steel's long position.| Kluang Rubber vs. YX Precious Metals | Kluang Rubber vs. Al Aqar Healthcare | Kluang Rubber vs. ONETECH SOLUTIONS HOLDINGS | Kluang Rubber vs. British American Tobacco |
| Mycron Steel vs. Press Metal Bhd | Mycron Steel vs. Southern Steel Bhd | Mycron Steel vs. Eonmetall Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |