Correlation Between Kluang Rubber and Dufu Tech
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Dufu Tech 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 Dufu Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Dufu Tech Corp, you can compare the effects of market volatilities on Kluang Rubber and Dufu Tech 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 Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Dufu Tech.
Diversification Opportunities for Kluang Rubber and Dufu Tech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kluang and Dufu is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Dufu Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufu Tech Corp 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 Dufu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufu Tech Corp has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Dufu Tech go up and down completely randomly.
Pair Corralation between Kluang Rubber and Dufu Tech
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.41 times more return on investment than Dufu Tech. However, Kluang Rubber is 2.42 times less risky than Dufu Tech. It trades about -0.06 of its potential returns per unit of risk. Dufu Tech Corp is currently generating about -0.26 per unit of risk. If you would invest 576.00 in Kluang Rubber on October 16, 2024 and sell it today you would lose (4.00) from holding Kluang Rubber or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. Dufu Tech Corp
Performance |
| Timeline |
| Kluang Rubber |
| Dufu Tech Corp |
Kluang Rubber and Dufu Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Dufu Tech
The main advantage of trading using opposite Kluang Rubber and Dufu Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Dufu Tech 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 Dufu Tech will offset losses from the drop in Dufu Tech's long position.| Kluang Rubber vs. Mercury Industries Bhd | Kluang Rubber vs. Apex Healthcare Bhd | Kluang Rubber vs. Impiana Hotels Bhd | Kluang Rubber vs. Eonmetall Group Bhd |
| Dufu Tech vs. K One Technology Bhd | Dufu Tech vs. Senheng New Retail | Dufu Tech vs. Kluang Rubber | Dufu Tech vs. Public Packages 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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