Correlation Between Insas Bhd and Rubberex M
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Rubberex M 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 Rubberex M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Rubberex M, you can compare the effects of market volatilities on Insas Bhd and Rubberex M 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 Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Rubberex M.
Diversification Opportunities for Insas Bhd and Rubberex M
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Insas and Rubberex is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M 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 Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Insas Bhd i.e., Insas Bhd and Rubberex M go up and down completely randomly.
Pair Corralation between Insas Bhd and Rubberex M
Assuming the 90 days trading horizon Insas Bhd is expected to generate 0.53 times more return on investment than Rubberex M. However, Insas Bhd is 1.9 times less risky than Rubberex M. It trades about -0.09 of its potential returns per unit of risk. Rubberex M is currently generating about -0.17 per unit of risk. If you would invest 96.00 in Insas Bhd on September 4, 2024 and sell it today you would lose (3.00) from holding Insas Bhd or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insas Bhd vs. Rubberex M
Performance |
| Timeline |
| Insas Bhd |
| Rubberex M |
Insas Bhd and Rubberex M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Rubberex M
The main advantage of trading using opposite Insas Bhd and Rubberex M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Rubberex M 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 Rubberex M will offset losses from the drop in Rubberex M's long position.| Insas Bhd vs. Apex Healthcare Bhd | Insas Bhd vs. Press Metal Bhd | Insas Bhd vs. Lotte Chemical Titan | Insas Bhd vs. Aeon Credit Service |
| Rubberex M vs. Minetech Resources Bhd | Rubberex M vs. Swift Haulage Bhd | Rubberex M vs. Insas Bhd | Rubberex M 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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