Correlation Between Datasonic Group and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Datasonic Group 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 Datasonic Group and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datasonic Group Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on Datasonic Group 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 Datasonic Group with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datasonic Group and Kossan Rubber.
Diversification Opportunities for Datasonic Group and Kossan Rubber
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Datasonic and Kossan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Datasonic Group 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 Datasonic Group 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 Datasonic Group 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 Datasonic Group i.e., Datasonic Group and Kossan Rubber go up and down completely randomly.
Pair Corralation between Datasonic Group and Kossan Rubber
Assuming the 90 days trading horizon Datasonic Group is expected to generate 6.88 times less return on investment than Kossan Rubber. But when comparing it to its historical volatility, Datasonic Group Bhd is 1.58 times less risky than Kossan Rubber. It trades about 0.02 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Kossan Rubber Industries on August 24, 2024 and sell it today you would earn a total of 110.00 from holding Kossan Rubber Industries or generate 83.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datasonic Group Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| Datasonic Group Bhd |
| Kossan Rubber Industries |
Datasonic Group and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datasonic Group and Kossan Rubber
The main advantage of trading using opposite Datasonic Group and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datasonic Group 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.| Datasonic Group vs. Dagang Nexchange Bhd | Datasonic Group vs. Awanbiru Technology Bhd | Datasonic Group vs. Dataprep Holdings Bhd | Datasonic Group vs. Systech Bhd |
| Kossan Rubber vs. Rubberex M | Kossan Rubber vs. Digistar Bhd | Kossan Rubber vs. Minetech Resources Bhd | Kossan Rubber vs. OpenSys M 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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