Correlation Between FGV Holdings and Riverview Rubber
Can any of the company-specific risk be diversified away by investing in both FGV Holdings and Riverview 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 Riverview 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 Riverview Rubber Estates, you can compare the effects of market volatilities on FGV Holdings and Riverview 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 Riverview Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGV Holdings and Riverview Rubber.
Diversification Opportunities for FGV Holdings and Riverview Rubber
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FGV and Riverview is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings Bhd and Riverview Rubber Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverview Rubber Estates 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 Riverview Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverview Rubber Estates has no effect on the direction of FGV Holdings i.e., FGV Holdings and Riverview Rubber go up and down completely randomly.
Pair Corralation between FGV Holdings and Riverview Rubber
Assuming the 90 days trading horizon FGV Holdings Bhd is expected to generate 0.99 times more return on investment than Riverview Rubber. However, FGV Holdings Bhd is 1.01 times less risky than Riverview Rubber. It trades about 0.11 of its potential returns per unit of risk. Riverview Rubber Estates is currently generating about -0.04 per unit of risk. If you would invest 110.00 in FGV Holdings Bhd on August 27, 2024 and sell it today you would earn a total of 4.00 from holding FGV Holdings Bhd or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FGV Holdings Bhd vs. Riverview Rubber Estates
Performance |
| Timeline |
| FGV Holdings Bhd |
| Riverview Rubber Estates |
FGV Holdings and Riverview Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGV Holdings and Riverview Rubber
The main advantage of trading using opposite FGV Holdings and Riverview Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings position performs unexpectedly, Riverview 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 Riverview Rubber will offset losses from the drop in Riverview Rubber's long position.| FGV Holdings vs. Dnonce Tech Bhd | FGV Holdings vs. Sunzen Biotech Bhd | FGV Holdings vs. Minetech Resources Bhd | FGV Holdings vs. Computer Forms Bhd |
| Riverview Rubber vs. Oriental Food Industries | Riverview Rubber vs. Senheng New Retail | Riverview Rubber vs. Binasat Communications Bhd | Riverview 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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