Correlation Between Kossan Rubber and SSF Home
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and SSF Home 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 SSF Home 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 SSF Home Group, you can compare the effects of market volatilities on Kossan Rubber and SSF Home 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 SSF Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and SSF Home.
Diversification Opportunities for Kossan Rubber and SSF Home
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kossan and SSF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group 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 SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and SSF Home go up and down completely randomly.
Pair Corralation between Kossan Rubber and SSF Home
Assuming the 90 days trading horizon Kossan Rubber is expected to generate 1.31 times less return on investment than SSF Home. In addition to that, Kossan Rubber is 1.56 times more volatile than SSF Home Group. It trades about 0.03 of its total potential returns per unit of risk. SSF Home Group is currently generating about 0.07 per unit of volatility. If you would invest 28.00 in SSF Home Group on September 3, 2024 and sell it today you would earn a total of 6.00 from holding SSF Home Group or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kossan Rubber Industries vs. SSF Home Group
Performance |
| Timeline |
| Kossan Rubber Industries |
| SSF Home Group |
Kossan Rubber and SSF Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and SSF Home
The main advantage of trading using opposite Kossan Rubber and SSF Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, SSF Home 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 SSF Home will offset losses from the drop in SSF Home's long position.| Kossan Rubber vs. Minetech Resources Bhd | Kossan Rubber vs. Swift Haulage Bhd | Kossan Rubber vs. Insas Bhd | Kossan Rubber vs. Bina Darulaman Bhd |
| SSF Home vs. Choo Bee Metal | SSF Home vs. EA Technique M | SSF Home vs. Resintech Bhd | SSF Home vs. Minetech Resources 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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