Correlation Between Kossan Rubber and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech Bhd, you can compare the effects of market volatilities on Kossan Rubber and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and Duopharma Biotech.
Diversification Opportunities for Kossan Rubber and Duopharma Biotech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kossan and Duopharma is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and Duopharma Biotech go up and down completely randomly.
Pair Corralation between Kossan Rubber and Duopharma Biotech
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to generate 1.87 times more return on investment than Duopharma Biotech. However, Kossan Rubber is 1.87 times more volatile than Duopharma Biotech Bhd. It trades about 0.35 of its potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about -0.09 per unit of risk. If you would invest 209.00 in Kossan Rubber Industries on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Kossan Rubber Industries or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kossan Rubber Industries vs. Duopharma Biotech Bhd
Performance |
| Timeline |
| Kossan Rubber Industries |
| Duopharma Biotech Bhd |
Kossan Rubber and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and Duopharma Biotech
The main advantage of trading using opposite Kossan Rubber and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech's long position.| Kossan Rubber vs. Minetech Resources Bhd | Kossan Rubber vs. Sunzen Biotech Bhd | Kossan Rubber vs. ViTrox Bhd | Kossan Rubber vs. Hengyuan Refining |
| Duopharma Biotech vs. Apex Healthcare Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Sunzen Biotech Bhd | Duopharma Biotech vs. Hengyuan Refining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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