Correlation Between Kawan Food and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Kawan Food and Sports Toto 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 Kawan Food and Sports Toto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kawan Food Bhd and Sports Toto Berhad, you can compare the effects of market volatilities on Kawan Food and Sports Toto 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 Kawan Food with a short position of Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawan Food and Sports Toto.
Diversification Opportunities for Kawan Food and Sports Toto
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kawan and Sports is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kawan Food Bhd and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad and Kawan Food 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 Kawan Food Bhd are associated (or correlated) with Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Kawan Food i.e., Kawan Food and Sports Toto go up and down completely randomly.
Pair Corralation between Kawan Food and Sports Toto
Assuming the 90 days trading horizon Kawan Food Bhd is expected to generate 0.58 times more return on investment than Sports Toto. However, Kawan Food Bhd is 1.73 times less risky than Sports Toto. It trades about -0.09 of its potential returns per unit of risk. Sports Toto Berhad is currently generating about -0.2 per unit of risk. If you would invest 172.00 in Kawan Food Bhd on September 1, 2024 and sell it today you would lose (3.00) from holding Kawan Food Bhd or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kawan Food Bhd vs. Sports Toto Berhad
Performance |
| Timeline |
| Kawan Food Bhd |
| Sports Toto Berhad |
Kawan Food and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawan Food and Sports Toto
The main advantage of trading using opposite Kawan Food and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawan Food position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Kawan Food vs. British American Tobacco | Kawan Food vs. FARM FRESH BERHAD | Kawan Food vs. Apollo Food Holdings |
| Sports Toto vs. Carlsberg Brewery Malaysia | Sports Toto vs. Alliance Financial Group | Sports Toto vs. Press Metal Bhd | Sports Toto vs. Impiana Hotels 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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