Correlation Between Kluang Rubber and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and KPJ Healthcare 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 KPJ Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and KPJ Healthcare Bhd, you can compare the effects of market volatilities on Kluang Rubber and KPJ Healthcare 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 KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and KPJ Healthcare.
Diversification Opportunities for Kluang Rubber and KPJ Healthcare
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and KPJ is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare 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 KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and KPJ Healthcare go up and down completely randomly.
Pair Corralation between Kluang Rubber and KPJ Healthcare
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.27 times more return on investment than KPJ Healthcare. However, Kluang Rubber is 3.65 times less risky than KPJ Healthcare. It trades about 0.13 of its potential returns per unit of risk. KPJ Healthcare Bhd is currently generating about -0.25 per unit of risk. If you would invest 561.00 in Kluang Rubber on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Kluang Rubber or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. KPJ Healthcare Bhd
Performance |
| Timeline |
| Kluang Rubber |
| KPJ Healthcare Bhd |
Kluang Rubber and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and KPJ Healthcare
The main advantage of trading using opposite Kluang Rubber and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, KPJ Healthcare 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| Kluang Rubber vs. Bank Islam Malaysia | Kluang Rubber vs. Binasat Communications Bhd | Kluang Rubber vs. Eonmetall Group Bhd | Kluang Rubber vs. Press Metal Bhd |
| KPJ Healthcare vs. Public Bank Bhd | KPJ Healthcare vs. Dataprep Holdings Bhd | KPJ Healthcare vs. YX Precious Metals | KPJ Healthcare vs. Apollo Food Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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