Correlation Between OSK Holdings and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both OSK Holdings and Kossan 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 OSK Holdings and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSK Holdings Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on OSK Holdings and Kossan 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 OSK Holdings with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSK Holdings and Kossan Rubber.
Diversification Opportunities for OSK Holdings and Kossan Rubber
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OSK and Kossan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding OSK Holdings Bhd and Kossan Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kossan Rubber Industries and OSK Holdings 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 OSK Holdings Bhd are associated (or correlated) with Kossan Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kossan Rubber Industries has no effect on the direction of OSK Holdings i.e., OSK Holdings and Kossan Rubber go up and down completely randomly.
Pair Corralation between OSK Holdings and Kossan Rubber
Assuming the 90 days trading horizon OSK Holdings Bhd is expected to generate 0.41 times more return on investment than Kossan Rubber. However, OSK Holdings Bhd is 2.44 times less risky than Kossan Rubber. It trades about -0.19 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about -0.37 per unit of risk. If you would invest 175.00 in OSK Holdings Bhd on November 2, 2024 and sell it today you would lose (8.00) from holding OSK Holdings Bhd or give up 4.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSK Holdings Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| OSK Holdings Bhd |
| Kossan Rubber Industries |
OSK Holdings and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSK Holdings and Kossan Rubber
The main advantage of trading using opposite OSK Holdings and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSK Holdings position performs unexpectedly, Kossan 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 Kossan Rubber will offset losses from the drop in Kossan Rubber's long position.| OSK Holdings vs. Eonmetall Group Bhd | OSK Holdings vs. Cloudpoint Technology Berhad | OSK Holdings vs. MClean Technologies Bhd | OSK Holdings vs. Computer Forms Bhd |
| Kossan Rubber vs. Ho Hup Construction | Kossan Rubber vs. Sapura Industrial Bhd | Kossan Rubber vs. Central Industrial Corp | Kossan Rubber vs. FARM FRESH BERHAD |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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