Correlation Between Kossan Rubber and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and MClean Technologies 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 Kossan Rubber and MClean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kossan Rubber Industries and MClean Technologies Bhd, you can compare the effects of market volatilities on Kossan Rubber and MClean Technologies 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 Kossan Rubber with a short position of MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and MClean Technologies.
Diversification Opportunities for Kossan Rubber and MClean Technologies
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kossan and MClean is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and Kossan Rubber 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 Kossan Rubber Industries are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and MClean Technologies go up and down completely randomly.
Pair Corralation between Kossan Rubber and MClean Technologies
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to under-perform the MClean Technologies. In addition to that, Kossan Rubber is 1.53 times more volatile than MClean Technologies Bhd. It trades about -0.19 of its total potential returns per unit of risk. MClean Technologies Bhd is currently generating about 0.01 per unit of volatility. If you would invest 29.00 in MClean Technologies Bhd on November 28, 2024 and sell it today you would earn a total of 0.00 from holding MClean Technologies Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kossan Rubber Industries vs. MClean Technologies Bhd
Performance |
| Timeline |
| Kossan Rubber Industries |
| MClean Technologies Bhd |
Kossan Rubber and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and MClean Technologies
The main advantage of trading using opposite Kossan Rubber and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| Kossan Rubber vs. Ho Hup Construction | Kossan Rubber vs. Farm Price Holdings | Kossan Rubber vs. Petronas Chemicals Group | Kossan Rubber vs. Sports Toto Berhad |
| MClean Technologies vs. Sunway Construction Group | MClean Technologies vs. DC HEALTHCARE HOLDINGS | MClean Technologies vs. Sports Toto Berhad | MClean Technologies vs. TAS Offshore 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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