Correlation Between Kobay Tech and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Kobay Tech and TAS Offshore 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 TAS Offshore 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 TAS Offshore Bhd, you can compare the effects of market volatilities on Kobay Tech and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and TAS Offshore.
Diversification Opportunities for Kobay Tech and TAS Offshore
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kobay and TAS is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Kobay Tech i.e., Kobay Tech and TAS Offshore go up and down completely randomly.
Pair Corralation between Kobay Tech and TAS Offshore
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to under-perform the TAS Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Kobay Tech Bhd is 1.33 times less risky than TAS Offshore. The stock trades about -0.02 of its potential returns per unit of risk. The TAS Offshore Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19.00 in TAS Offshore Bhd on September 15, 2024 and sell it today you would earn a total of 47.00 from holding TAS Offshore Bhd or generate 247.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kobay Tech Bhd vs. TAS Offshore Bhd
Performance |
| Timeline |
| Kobay Tech Bhd |
| TAS Offshore Bhd |
Kobay Tech and TAS Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and TAS Offshore
The main advantage of trading using opposite Kobay Tech and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.The idea behind Kobay Tech Bhd and TAS Offshore 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.| TAS Offshore vs. Kobay Tech Bhd | TAS Offshore vs. JF Technology BHD | TAS Offshore vs. CB Industrial Product | TAS Offshore vs. MyTech Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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