Correlation Between Kobay Tech and OSK Holdings
Can any of the company-specific risk be diversified away by investing in both Kobay Tech and OSK Holdings 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 Kobay Tech and OSK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kobay Tech Bhd and OSK Holdings Bhd, you can compare the effects of market volatilities on Kobay Tech and OSK Holdings 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 Kobay Tech with a short position of OSK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and OSK Holdings.
Diversification Opportunities for Kobay Tech and OSK Holdings
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kobay and OSK is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and OSK Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSK Holdings Bhd and Kobay Tech 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 Kobay Tech Bhd are associated (or correlated) with OSK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSK Holdings Bhd has no effect on the direction of Kobay Tech i.e., Kobay Tech and OSK Holdings go up and down completely randomly.
Pair Corralation between Kobay Tech and OSK Holdings
Assuming the 90 days trading horizon Kobay Tech is expected to generate 3.37 times less return on investment than OSK Holdings. In addition to that, Kobay Tech is 2.67 times more volatile than OSK Holdings Bhd. It trades about 0.01 of its total potential returns per unit of risk. OSK Holdings Bhd is currently generating about 0.1 per unit of volatility. If you would invest 118.00 in OSK Holdings Bhd on September 15, 2024 and sell it today you would earn a total of 56.00 from holding OSK Holdings Bhd or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Kobay Tech Bhd vs. OSK Holdings Bhd
Performance |
| Timeline |
| Kobay Tech Bhd |
| OSK Holdings Bhd |
Kobay Tech and OSK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and OSK Holdings
The main advantage of trading using opposite Kobay Tech and OSK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech position performs unexpectedly, OSK Holdings 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 OSK Holdings will offset losses from the drop in OSK Holdings' long position.The idea behind Kobay Tech Bhd and OSK Holdings Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| OSK Holdings vs. Cloudpoint Technology Berhad | OSK Holdings vs. Kobay Tech Bhd | OSK Holdings vs. Cengild Medical Berhad | OSK Holdings vs. MClean Technologies 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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