Correlation Between Kluang Rubber and Senheng New
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Senheng New 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 Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Senheng New Retail, you can compare the effects of market volatilities on Kluang Rubber and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Senheng New.
Diversification Opportunities for Kluang Rubber and Senheng New
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kluang and Senheng is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Senheng New go up and down completely randomly.
Pair Corralation between Kluang Rubber and Senheng New
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.8 times more return on investment than Senheng New. However, Kluang Rubber is 1.25 times less risky than Senheng New. It trades about 0.08 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.03 per unit of risk. If you would invest 368.00 in Kluang Rubber on September 2, 2024 and sell it today you would earn a total of 216.00 from holding Kluang Rubber or generate 58.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.61% |
| Values | Daily Returns |
Kluang Rubber vs. Senheng New Retail
Performance |
| Timeline |
| Kluang Rubber |
| Senheng New Retail |
Kluang Rubber and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Senheng New
The main advantage of trading using opposite Kluang Rubber and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Kluang Rubber vs. British American Tobacco | Kluang Rubber vs. FARM FRESH BERHAD | Kluang Rubber vs. Apollo Food Holdings |
| Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Bina Darulaman 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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