Correlation Between FGV Holdings and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both FGV Holdings and Kluang 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 FGV Holdings and Kluang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGV Holdings Bhd and Kluang Rubber, you can compare the effects of market volatilities on FGV Holdings and Kluang 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 FGV Holdings with a short position of Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGV Holdings and Kluang Rubber.
Diversification Opportunities for FGV Holdings and Kluang Rubber
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between FGV and Kluang is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings Bhd and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber and FGV 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 FGV Holdings Bhd are associated (or correlated) with Kluang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kluang Rubber has no effect on the direction of FGV Holdings i.e., FGV Holdings and Kluang Rubber go up and down completely randomly.
Pair Corralation between FGV Holdings and Kluang Rubber
Assuming the 90 days trading horizon FGV Holdings Bhd is expected to under-perform the Kluang Rubber. In addition to that, FGV Holdings is 1.07 times more volatile than Kluang Rubber. It trades about -0.06 of its total potential returns per unit of risk. Kluang Rubber is currently generating about 0.07 per unit of volatility. If you would invest 465.00 in Kluang Rubber on November 7, 2024 and sell it today you would earn a total of 115.00 from holding Kluang Rubber or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
FGV Holdings Bhd vs. Kluang Rubber
Performance |
| Timeline |
| FGV Holdings Bhd |
| Kluang Rubber |
FGV Holdings and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGV Holdings and Kluang Rubber
The main advantage of trading using opposite FGV Holdings and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings position performs unexpectedly, Kluang 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 Kluang Rubber will offset losses from the drop in Kluang Rubber's long position.| FGV Holdings vs. Uchi Technologies Bhd | FGV Holdings vs. Eonmetall Group Bhd | FGV Holdings vs. Apex Healthcare Bhd | FGV Holdings vs. Al Aqar Healthcare |
| Kluang Rubber vs. Eonmetall Group Bhd | Kluang Rubber vs. Ho Hup Construction | Kluang Rubber vs. Kawan Food Bhd | Kluang Rubber vs. PMB Technology 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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