Correlation Between Kluang Rubber and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Icon Offshore 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 Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Icon Offshore Bhd, you can compare the effects of market volatilities on Kluang Rubber and Icon Offshore 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 Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Icon Offshore.
Diversification Opportunities for Kluang Rubber and Icon Offshore
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kluang and Icon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Icon Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Offshore 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 Icon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Offshore Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Icon Offshore go up and down completely randomly.
Pair Corralation between Kluang Rubber and Icon Offshore
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 3.02 times less return on investment than Icon Offshore. But when comparing it to its historical volatility, Kluang Rubber is 2.37 times less risky than Icon Offshore. It trades about 0.05 of its potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Icon Offshore Bhd on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Icon Offshore Bhd or generate 151.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.65% |
| Values | Daily Returns |
Kluang Rubber vs. Icon Offshore Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Icon Offshore Bhd |
Kluang Rubber and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Icon Offshore
The main advantage of trading using opposite Kluang Rubber and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Icon Offshore 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 Icon Offshore will offset losses from the drop in Icon Offshore'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 |
| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Daya Materials Bhd | Icon Offshore vs. Digistar Bhd | Icon Offshore vs. Minetech Resources 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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