Correlation Between Kluang Rubber and Mr D
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Mr D 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 Mr D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Mr D I, you can compare the effects of market volatilities on Kluang Rubber and Mr D 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 Mr D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Mr D.
Diversification Opportunities for Kluang Rubber and Mr D
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and 5296 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Mr D I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr D I 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 Mr D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr D I has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Mr D go up and down completely randomly.
Pair Corralation between Kluang Rubber and Mr D
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.57 times more return on investment than Mr D. However, Kluang Rubber is 1.75 times less risky than Mr D. It trades about -0.02 of its potential returns per unit of risk. Mr D I is currently generating about -0.09 per unit of risk. If you would invest 587.00 in Kluang Rubber on November 2, 2024 and sell it today you would lose (17.00) from holding Kluang Rubber or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.03% |
| Values | Daily Returns |
Kluang Rubber vs. Mr D I
Performance |
| Timeline |
| Kluang Rubber |
| Mr D I |
Kluang Rubber and Mr D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Mr D
The main advantage of trading using opposite Kluang Rubber and Mr D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Mr D 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 Mr D will offset losses from the drop in Mr D's long position.| Kluang Rubber vs. Farm Price Holdings | Kluang Rubber vs. Globetronics Tech Bhd | Kluang Rubber vs. Cloudpoint Technology Berhad | Kluang Rubber vs. MI Technovation Bhd |
| Mr D vs. Supercomnet Technologies Bhd | Mr D vs. PMB Technology Bhd | Mr D vs. MI Technovation Bhd | Mr D vs. Sports Toto Berhad |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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