Correlation Between YTL Hospitality and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality 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 YTL Hospitality and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Hospitality REIT and Kossan Rubber Industries, you can compare the effects of market volatilities on YTL Hospitality 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 YTL Hospitality with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Kossan Rubber.
Diversification Opportunities for YTL Hospitality and Kossan Rubber
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between YTL and Kossan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT 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 YTL Hospitality 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 YTL Hospitality REIT 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 YTL Hospitality i.e., YTL Hospitality and Kossan Rubber go up and down completely randomly.
Pair Corralation between YTL Hospitality and Kossan Rubber
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to generate 0.34 times more return on investment than Kossan Rubber. However, YTL Hospitality REIT is 2.92 times less risky than Kossan Rubber. It trades about -0.17 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about -0.28 per unit of risk. If you would invest 119.00 in YTL Hospitality REIT on November 30, 2024 and sell it today you would lose (10.00) from holding YTL Hospitality REIT or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Kossan Rubber Industries
Performance |
| Timeline |
| YTL Hospitality REIT |
| Kossan Rubber Industries |
YTL Hospitality and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Kossan Rubber
The main advantage of trading using opposite YTL Hospitality and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality 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.| YTL Hospitality vs. MClean Technologies Bhd | YTL Hospitality vs. Sports Toto Berhad | YTL Hospitality vs. Choo Bee Metal |
| Kossan Rubber vs. Sports Toto Berhad | Kossan Rubber vs. Resintech Bhd | Kossan Rubber vs. Duopharma Biotech Bhd | Kossan Rubber vs. Homeritz 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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