Correlation Between Bina Darulaman and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman 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 Bina Darulaman and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bina Darulaman Bhd and Kossan Rubber Industries, you can compare the effects of market volatilities on Bina Darulaman 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 Bina Darulaman with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and Kossan Rubber.
Diversification Opportunities for Bina Darulaman and Kossan Rubber
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bina and Kossan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman 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 Bina Darulaman 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 Bina Darulaman 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 Bina Darulaman i.e., Bina Darulaman and Kossan Rubber go up and down completely randomly.
Pair Corralation between Bina Darulaman and Kossan Rubber
Assuming the 90 days trading horizon Bina Darulaman is expected to generate 31.48 times less return on investment than Kossan Rubber. In addition to that, Bina Darulaman is 1.01 times more volatile than Kossan Rubber Industries. It trades about 0.01 of its total potential returns per unit of risk. Kossan Rubber Industries is currently generating about 0.33 per unit of volatility. If you would invest 214.00 in Kossan Rubber Industries on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Kossan Rubber Industries or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. Kossan Rubber Industries
Performance |
| Timeline |
| Bina Darulaman Bhd |
| Kossan Rubber Industries |
Bina Darulaman and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and Kossan Rubber
The main advantage of trading using opposite Bina Darulaman and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman 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.| Bina Darulaman vs. Malayan Banking Bhd | Bina Darulaman vs. Public Bank Bhd | Bina Darulaman vs. Petronas Chemicals Group | Bina Darulaman vs. Tenaga Nasional Bhd |
| Kossan Rubber vs. Kawan Food Bhd | Kossan Rubber vs. Kluang Rubber | Kossan Rubber vs. K One Technology Bhd | Kossan Rubber vs. Daya Materials 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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