Correlation Between Kluang Rubber and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Kluang Rubber and Mercury Industries 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 Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kluang Rubber and Mercury Industries Bhd, you can compare the effects of market volatilities on Kluang Rubber and Mercury Industries 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 Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kluang Rubber and Mercury Industries.
Diversification Opportunities for Kluang Rubber and Mercury Industries
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kluang and Mercury is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kluang Rubber and Mercury Industries Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Industries 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 Mercury Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Industries Bhd has no effect on the direction of Kluang Rubber i.e., Kluang Rubber and Mercury Industries go up and down completely randomly.
Pair Corralation between Kluang Rubber and Mercury Industries
Assuming the 90 days trading horizon Kluang Rubber is expected to generate 0.64 times more return on investment than Mercury Industries. However, Kluang Rubber is 1.55 times less risky than Mercury Industries. It trades about -0.07 of its potential returns per unit of risk. Mercury Industries Bhd is currently generating about -0.19 per unit of risk. If you would invest 571.00 in Kluang Rubber on August 31, 2024 and sell it today you would lose (14.00) from holding Kluang Rubber or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kluang Rubber vs. Mercury Industries Bhd
Performance |
| Timeline |
| Kluang Rubber |
| Mercury Industries Bhd |
Kluang Rubber and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kluang Rubber and Mercury Industries
The main advantage of trading using opposite Kluang Rubber and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kluang Rubber position performs unexpectedly, Mercury Industries 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 Mercury Industries will offset losses from the drop in Mercury Industries' 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 |
| Mercury Industries vs. YX Precious Metals | Mercury Industries vs. Kossan Rubber Industries | Mercury Industries vs. Binasat Communications Bhd | Mercury Industries vs. Aeon Credit Service |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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