Correlation Between Kluang Rubber and Awanbiru Technology
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Awanbiru Technology 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 Awanbiru Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Awanbiru Technology Bhd, you can compare the effects of market volatilities on Kluang Rubber and Awanbiru Technology 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 Awanbiru Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Awanbiru Technology.
Diversification Opportunities for Kluang Rubber and Awanbiru Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kluang and Awanbiru is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Awanbiru Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awanbiru Technology 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 Awanbiru Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awanbiru Technology Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Awanbiru Technology go up and down completely randomly.
Pair Corralation between Kluang Rubber and Awanbiru Technology
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.32 times more return on investment than Awanbiru Technology. However, Kluang Rubber is 3.12 times less risky than Awanbiru Technology. It trades about 0.08 of its potential returns per unit of risk. Awanbiru Technology Bhd is currently generating about 0.01 per unit of risk. If you would invest 367.00 in Kluang Rubber on August 27, 2024 and sell it today you would earn a total of 215.00 from holding Kluang Rubber or generate 58.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.58% |
| Values | Daily Returns |
Kluang Rubber vs. Awanbiru Technology Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Awanbiru Technology Bhd |
Kluang Rubber and Awanbiru Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Awanbiru Technology
The main advantage of trading using opposite Kluang Rubber and Awanbiru Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Awanbiru Technology 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 Awanbiru Technology will offset losses from the drop in Awanbiru Technology'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 |
| Awanbiru Technology vs. Kluang Rubber | Awanbiru Technology vs. Daya Materials Bhd | Awanbiru Technology vs. Press Metal Bhd | Awanbiru Technology vs. Kawan Food 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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