Correlation Between Kawan Food and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Kawan Food and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Kawan Food and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawan Food and Asian Pac.
Diversification Opportunities for Kawan Food and Asian Pac
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kawan and Asian is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kawan Food Bhd and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Kawan Food i.e., Kawan Food and Asian Pac go up and down completely randomly.
Pair Corralation between Kawan Food and Asian Pac
Assuming the 90 days trading horizon Kawan Food Bhd is expected to under-perform the Asian Pac. But the stock apears to be less risky and, when comparing its historical volatility, Kawan Food Bhd is 3.87 times less risky than Asian Pac. The stock trades about -0.02 of its potential returns per unit of risk. The Asian Pac Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Asian Pac Holdings on September 14, 2024 and sell it today you would lose (1.00) from holding Asian Pac Holdings or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Kawan Food Bhd vs. Asian Pac Holdings
Performance |
| Timeline |
| Kawan Food Bhd |
| Asian Pac Holdings |
Kawan Food and Asian Pac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawan Food and Asian Pac
The main advantage of trading using opposite Kawan Food and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawan Food position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.| Kawan Food vs. Riverview Rubber Estates | Kawan Food vs. DC HEALTHCARE HOLDINGS | Kawan Food vs. Sports Toto Berhad | Kawan Food vs. Lyc Healthcare Bhd |
| Asian Pac vs. Kawan Food Bhd | Asian Pac vs. Oriental Food Industries | Asian Pac vs. Computer Forms Bhd | Asian Pac vs. Malayan Banking 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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