Correlation Between Sunway Construction and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Sunway Construction 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 Sunway Construction and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and Kossan Rubber Industries, you can compare the effects of market volatilities on Sunway Construction 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 Sunway Construction with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Kossan Rubber.
Diversification Opportunities for Sunway Construction and Kossan Rubber
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunway and Kossan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group 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 Sunway Construction 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 Sunway Construction Group 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 Sunway Construction i.e., Sunway Construction and Kossan Rubber go up and down completely randomly.
Pair Corralation between Sunway Construction and Kossan Rubber
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.83 times more return on investment than Kossan Rubber. However, Sunway Construction Group is 1.21 times less risky than Kossan Rubber. It trades about 0.1 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about 0.05 per unit of risk. If you would invest 154.00 in Sunway Construction Group on November 29, 2024 and sell it today you would earn a total of 280.00 from holding Sunway Construction Group or generate 181.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. Kossan Rubber Industries
Performance |
| Timeline |
| Sunway Construction |
| Kossan Rubber Industries |
Sunway Construction and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Kossan Rubber
The main advantage of trading using opposite Sunway Construction and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction 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.| Sunway Construction vs. Star Media Group | Sunway Construction vs. Awanbiru Technology Bhd | Sunway Construction vs. Genetec Technology Bhd | Sunway Construction vs. Greatech Technology Bhd |
| Kossan Rubber vs. Star Media Group | Kossan Rubber vs. Mercury Industries Bhd | Kossan Rubber vs. Melewar Industrial Group | Kossan Rubber vs. CPE Technology 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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