Correlation Between Oriental Food and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Kluang 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 Oriental Food and Kluang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and Kluang Rubber, you can compare the effects of market volatilities on Oriental Food and Kluang 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 Oriental Food with a short position of Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Kluang Rubber.
Diversification Opportunities for Oriental Food and Kluang Rubber
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oriental and Kluang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber and Oriental Food 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 Oriental Food Industries are associated (or correlated) with Kluang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kluang Rubber has no effect on the direction of Oriental Food i.e., Oriental Food and Kluang Rubber go up and down completely randomly.
Pair Corralation between Oriental Food and Kluang Rubber
Assuming the 90 days trading horizon Oriental Food is expected to generate 1.02 times less return on investment than Kluang Rubber. In addition to that, Oriental Food is 1.1 times more volatile than Kluang Rubber. It trades about 0.07 of its total potential returns per unit of risk. Kluang Rubber is currently generating about 0.08 per unit of volatility. If you would invest 368.00 in Kluang Rubber on September 4, 2024 and sell it today you would earn a total of 216.00 from holding Kluang Rubber or generate 58.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.55% |
| Values | Daily Returns |
Oriental Food Industries vs. Kluang Rubber
Performance |
| Timeline |
| Oriental Food Industries |
| Kluang Rubber |
Oriental Food and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Kluang Rubber
The main advantage of trading using opposite Oriental Food and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Kluang 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 Kluang Rubber will offset losses from the drop in Kluang Rubber's long position.| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. MI Technovation Bhd | Oriental Food vs. Lotte Chemical Titan | Oriental Food vs. Awanbiru Technology Bhd |
| Kluang Rubber vs. Aurelius Technologies Bhd | Kluang Rubber vs. Sungei Bagan Rubber | Kluang Rubber vs. MClean Technologies Bhd | Kluang Rubber vs. Eversafe Rubber 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |