Correlation Between Kluang Rubber and Deleum Bhd
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Deleum 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 Deleum 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 Deleum Bhd, you can compare the effects of market volatilities on Kluang Rubber and Deleum 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 Deleum Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Deleum Bhd.
Diversification Opportunities for Kluang Rubber and Deleum Bhd
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kluang and Deleum is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Deleum Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deleum 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 Deleum Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deleum Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Deleum Bhd go up and down completely randomly.
Pair Corralation between Kluang Rubber and Deleum Bhd
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.88 times more return on investment than Deleum Bhd. However, Kluang Rubber is 1.14 times less risky than Deleum Bhd. It trades about 0.09 of its potential returns per unit of risk. Deleum Bhd is currently generating about -0.08 per unit of risk. If you would invest 566.00 in Kluang Rubber on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Kluang Rubber or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. Deleum Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Deleum Bhd |
Kluang Rubber and Deleum Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Deleum Bhd
The main advantage of trading using opposite Kluang Rubber and Deleum Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Deleum 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 Deleum Bhd will offset losses from the drop in Deleum Bhd's long position.| Kluang Rubber vs. British American Tobacco | Kluang Rubber vs. FARM FRESH BERHAD | Kluang Rubber vs. Apollo Food Holdings |
| Deleum Bhd vs. Farm Price Holdings | Deleum Bhd vs. Sapura Industrial Bhd | Deleum Bhd vs. Kluang Rubber | Deleum Bhd vs. Binasat Communications 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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