Correlation Between Insas Bhd and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Eversafe Rubber 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 Insas Bhd and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Insas Bhd and Eversafe Rubber 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 Insas Bhd with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Eversafe Rubber.
Diversification Opportunities for Insas Bhd and Eversafe Rubber
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Insas and Eversafe is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Insas Bhd 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 Insas Bhd are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Insas Bhd i.e., Insas Bhd and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Insas Bhd and Eversafe Rubber
Assuming the 90 days trading horizon Insas Bhd is expected to generate 0.36 times more return on investment than Eversafe Rubber. However, Insas Bhd is 2.79 times less risky than Eversafe Rubber. It trades about -0.17 of its potential returns per unit of risk. Eversafe Rubber Bhd is currently generating about -0.13 per unit of risk. If you would invest 103.00 in Insas Bhd on August 28, 2024 and sell it today you would lose (10.00) from holding Insas Bhd or give up 9.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insas Bhd vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Insas Bhd |
| Eversafe Rubber Bhd |
Insas Bhd and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Eversafe Rubber
The main advantage of trading using opposite Insas Bhd and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Eversafe Rubber 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Insas Bhd vs. Diversified Gateway Solutions | Insas Bhd vs. Dnonce Tech Bhd | Insas Bhd vs. EA Technique M | Insas Bhd vs. MI Technovation Bhd |
| Eversafe Rubber vs. Digistar Bhd | Eversafe Rubber vs. Minetech Resources Bhd | Eversafe Rubber vs. OpenSys M Bhd | Eversafe Rubber vs. Insas 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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