Correlation Between Oriental Food and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Oriental Food 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 Oriental Food and Kossan 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 Kossan Rubber Industries, you can compare the effects of market volatilities on Oriental Food 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 Oriental Food with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Kossan Rubber.
Diversification Opportunities for Oriental Food and Kossan Rubber
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oriental and Kossan is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries 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 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 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 Oriental Food i.e., Oriental Food and Kossan Rubber go up and down completely randomly.
Pair Corralation between Oriental Food and Kossan Rubber
Assuming the 90 days trading horizon Oriental Food Industries is expected to generate 0.61 times more return on investment than Kossan Rubber. However, Oriental Food Industries is 1.63 times less risky than Kossan Rubber. It trades about -0.03 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about -0.24 per unit of risk. If you would invest 165.00 in Oriental Food Industries on October 20, 2024 and sell it today you would lose (2.00) from holding Oriental Food Industries or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oriental Food Industries vs. Kossan Rubber Industries
Performance |
| Timeline |
| Oriental Food Industries |
| Kossan Rubber Industries |
Oriental Food and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Kossan Rubber
The main advantage of trading using opposite Oriental Food and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food 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.| Oriental Food vs. SSF Home Group | Oriental Food vs. Kluang Rubber | Oriental Food vs. Riverview Rubber Estates | Oriental Food vs. Homeritz Bhd |
| Kossan Rubber vs. Greatech Technology Bhd | Kossan Rubber vs. TAS Offshore Bhd | Kossan Rubber vs. Resintech Bhd | Kossan Rubber vs. Cloudpoint Technology Berhad |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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