Correlation Between Mr D and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Mr D and Eversafe 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 Mr D and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mr D I and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Mr D and Eversafe 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 Mr D with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr D and Eversafe Rubber.
Diversification Opportunities for Mr D and Eversafe Rubber
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5296 and Eversafe is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mr D I and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Mr D 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 Mr D I are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Mr D i.e., Mr D and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Mr D and Eversafe Rubber
Assuming the 90 days trading horizon Mr D I is expected to under-perform the Eversafe Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Mr D I is 2.62 times less risky than Eversafe Rubber. The stock trades about -0.17 of its potential returns per unit of risk. The Eversafe Rubber Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Eversafe Rubber Bhd on October 21, 2024 and sell it today you would earn a total of 0.00 from holding Eversafe Rubber Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mr D I vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Mr D I |
| Eversafe Rubber Bhd |
Mr D and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr D and Eversafe Rubber
The main advantage of trading using opposite Mr D and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr D position performs unexpectedly, Eversafe 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Mr D vs. Computer Forms Bhd | Mr D vs. Kossan Rubber Industries | Mr D vs. Petronas Chemicals Group | Mr D vs. Kluang Rubber |
| Eversafe Rubber vs. Sapura Industrial Bhd | Eversafe Rubber vs. Mesiniaga Bhd | Eversafe Rubber vs. MSCM Holdings Bhd | Eversafe Rubber vs. Supermax 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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