Correlation Between Kobay Tech and Oriental Food
Can any of the company-specific risk be diversified away by investing in both Kobay Tech and Oriental Food 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 Oriental Food 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 Oriental Food Industries, you can compare the effects of market volatilities on Kobay Tech and Oriental Food 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 Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and Oriental Food.
Diversification Opportunities for Kobay Tech and Oriental Food
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kobay and Oriental is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Kobay Tech i.e., Kobay Tech and Oriental Food go up and down completely randomly.
Pair Corralation between Kobay Tech and Oriental Food
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to under-perform the Oriental Food. In addition to that, Kobay Tech is 1.32 times more volatile than Oriental Food Industries. It trades about -0.03 of its total potential returns per unit of risk. Oriental Food Industries is currently generating about 0.04 per unit of volatility. If you would invest 115.00 in Oriental Food Industries on November 4, 2024 and sell it today you would earn a total of 43.00 from holding Oriental Food Industries or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.54% |
| Values | Daily Returns |
Kobay Tech Bhd vs. Oriental Food Industries
Performance |
| Timeline |
| Kobay Tech Bhd |
| Oriental Food Industries |
Kobay Tech and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and Oriental Food
The main advantage of trading using opposite Kobay Tech and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| Kobay Tech vs. Al Aqar Healthcare | Kobay Tech vs. Cloudpoint Technology Berhad | Kobay Tech vs. YTL Hospitality REIT | Kobay Tech vs. BP Plastics Holding |
| Oriental Food vs. Hong Leong Bank | Oriental Food vs. RHB Bank Bhd | Oriental Food vs. Alliance Financial Group | Oriental Food vs. PIE Industrial 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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