Correlation Between Kossan Rubber and Oriental Food
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and Oriental Food 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 Oriental Food 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 Oriental Food Industries, you can compare the effects of market volatilities on Kossan Rubber and Oriental Food 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 Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and Oriental Food.
Diversification Opportunities for Kossan Rubber and Oriental Food
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kossan and Oriental is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and Oriental Food go up and down completely randomly.
Pair Corralation between Kossan Rubber and Oriental Food
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to under-perform the Oriental Food. In addition to that, Kossan Rubber is 1.63 times more volatile than Oriental Food Industries. It trades about -0.24 of its total potential returns per unit of risk. Oriental Food Industries is currently generating about -0.03 per unit of volatility. If you would invest 165.00 in Oriental Food Industries on October 20, 2024 and sell it today you would lose (2.00) from holding Oriental Food Industries or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kossan Rubber Industries vs. Oriental Food Industries
Performance |
| Timeline |
| Kossan Rubber Industries |
| Oriental Food Industries |
Kossan Rubber and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and Oriental Food
The main advantage of trading using opposite Kossan Rubber and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| Kossan Rubber vs. Greatech Technology Bhd | Kossan Rubber vs. TAS Offshore Bhd | Kossan Rubber vs. Resintech Bhd | Kossan Rubber vs. Cloudpoint Technology Berhad |
| Oriental Food vs. SSF Home Group | Oriental Food vs. Kluang Rubber | Oriental Food vs. Riverview Rubber Estates | Oriental Food vs. Homeritz 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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