Correlation Between Kossan Rubber and Impiana Hotels
Can any of the company-specific risk be diversified away by investing in both Kossan Rubber and Impiana Hotels 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 Impiana Hotels 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 Impiana Hotels Bhd, you can compare the effects of market volatilities on Kossan Rubber and Impiana Hotels 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 Impiana Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kossan Rubber and Impiana Hotels.
Diversification Opportunities for Kossan Rubber and Impiana Hotels
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kossan and Impiana is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kossan Rubber Industries and Impiana Hotels Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impiana Hotels 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 Impiana Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impiana Hotels Bhd has no effect on the direction of Kossan Rubber i.e., Kossan Rubber and Impiana Hotels go up and down completely randomly.
Pair Corralation between Kossan Rubber and Impiana Hotels
Assuming the 90 days trading horizon Kossan Rubber Industries is expected to generate 0.64 times more return on investment than Impiana Hotels. However, Kossan Rubber Industries is 1.57 times less risky than Impiana Hotels. It trades about 0.32 of its potential returns per unit of risk. Impiana Hotels Bhd is currently generating about 0.08 per unit of risk. If you would invest 215.00 in Kossan Rubber Industries on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Kossan Rubber Industries or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kossan Rubber Industries vs. Impiana Hotels Bhd
Performance |
| Timeline |
| Kossan Rubber Industries |
| Impiana Hotels Bhd |
Kossan Rubber and Impiana Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kossan Rubber and Impiana Hotels
The main advantage of trading using opposite Kossan Rubber and Impiana Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kossan Rubber position performs unexpectedly, Impiana Hotels 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 Impiana Hotels will offset losses from the drop in Impiana Hotels' long position.| Kossan Rubber vs. Minetech Resources Bhd | Kossan Rubber vs. Swift Haulage Bhd | Kossan Rubber vs. Insas Bhd | Kossan Rubber vs. Bina Darulaman Bhd |
| Impiana Hotels vs. Minetech Resources Bhd | Impiana Hotels vs. Swift Haulage Bhd | Impiana Hotels vs. Insas Bhd | Impiana Hotels vs. Bina Darulaman 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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