Correlation Between Kossan Rubber and Datasonic Group
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and Datasonic Group 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 Datasonic Group 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 Datasonic Group Bhd, you can compare the effects of market volatilities on Kossan Rubber and Datasonic Group 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 Datasonic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and Datasonic Group.
Diversification Opportunities for Kossan Rubber and Datasonic Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kossan and Datasonic is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and Datasonic Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datasonic Group 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 Datasonic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datasonic Group Bhd has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and Datasonic Group go up and down completely randomly.
Pair Corralation between Kossan Rubber and Datasonic Group
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to generate 1.52 times more return on investment than Datasonic Group. However, Kossan Rubber is 1.52 times more volatile than Datasonic Group Bhd. It trades about 0.08 of its potential returns per unit of risk. Datasonic Group Bhd is currently generating about 0.0 per unit of risk. If you would invest 102.00 in Kossan Rubber Industries on August 28, 2024 and sell it today you would earn a total of 139.00 from holding Kossan Rubber Industries or generate 136.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kossan Rubber Industries vs. Datasonic Group Bhd
Performance |
| Timeline |
| Kossan Rubber Industries |
| Datasonic Group Bhd |
Kossan Rubber and Datasonic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and Datasonic Group
The main advantage of trading using opposite Kossan Rubber and Datasonic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, Datasonic Group 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 Datasonic Group will offset losses from the drop in Datasonic Group's long position.| Kossan Rubber vs. PMB Technology Bhd | Kossan Rubber vs. Lysaght Galvanized Steel | Kossan Rubber vs. Coraza Integrated Technology | Kossan Rubber vs. Southern Steel Bhd |
| Datasonic Group vs. Lysaght Galvanized Steel | Datasonic Group vs. Icon Offshore Bhd | Datasonic Group vs. Diversified Gateway Solutions | Datasonic Group vs. Binasat Communications 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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