Correlation Between Kossan Rubber and Shangri La
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on Kossan Rubber and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and Shangri La.
Diversification Opportunities for Kossan Rubber and Shangri La
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kossan and Shangri is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and Shangri La go up and down completely randomly.
Pair Corralation between Kossan Rubber and Shangri La
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to generate 3.3 times more return on investment than Shangri La. However, Kossan Rubber is 3.3 times more volatile than Shangri La Hotels. It trades about 0.13 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.09 per unit of risk. If you would invest 186.00 in Kossan Rubber Industries on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Kossan Rubber Industries or generate 29.57% 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. Shangri La Hotels
Performance |
| Timeline |
| Kossan Rubber Industries |
| Shangri La Hotels |
Kossan Rubber and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and Shangri La
The main advantage of trading using opposite Kossan Rubber and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La'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 |
| Shangri La vs. CB Industrial Product | Shangri La vs. Mycron Steel Bhd | Shangri La vs. PIE Industrial Bhd | Shangri La vs. YX Precious Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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