Correlation Between Kossan Rubber and YTL Hospitality
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and YTL Hospitality 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 YTL Hospitality 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 YTL Hospitality REIT, you can compare the effects of market volatilities on Kossan Rubber and YTL Hospitality 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 YTL Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and YTL Hospitality.
Diversification Opportunities for Kossan Rubber and YTL Hospitality
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kossan and YTL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and YTL Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Hospitality REIT 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 YTL Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Hospitality REIT has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and YTL Hospitality go up and down completely randomly.
Pair Corralation between Kossan Rubber and YTL Hospitality
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to generate 2.71 times more return on investment than YTL Hospitality. However, Kossan Rubber is 2.71 times more volatile than YTL Hospitality REIT. It trades about 0.33 of its potential returns per unit of risk. YTL Hospitality REIT is currently generating about 0.05 per unit of risk. If you would invest 214.00 in Kossan Rubber Industries on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Kossan Rubber Industries or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kossan Rubber Industries vs. YTL Hospitality REIT
Performance |
| Timeline |
| Kossan Rubber Industries |
| YTL Hospitality REIT |
Kossan Rubber and YTL Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and YTL Hospitality
The main advantage of trading using opposite Kossan Rubber and YTL Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, YTL Hospitality 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 YTL Hospitality will offset losses from the drop in YTL Hospitality's long position.| Kossan Rubber vs. Kawan Food Bhd | Kossan Rubber vs. Kluang Rubber | Kossan Rubber vs. K One Technology Bhd | Kossan Rubber vs. Daya Materials Bhd |
| YTL Hospitality vs. Eversafe Rubber Bhd | YTL Hospitality vs. Kluang Rubber | YTL Hospitality vs. FARM FRESH BERHAD | YTL Hospitality vs. JF Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |