Correlation Between Kawan Food and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Kawan Food and TAS Offshore 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 TAS Offshore 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 TAS Offshore Bhd, you can compare the effects of market volatilities on Kawan Food and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawan Food and TAS Offshore.
Diversification Opportunities for Kawan Food and TAS Offshore
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kawan and TAS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kawan Food Bhd and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Kawan Food i.e., Kawan Food and TAS Offshore go up and down completely randomly.
Pair Corralation between Kawan Food and TAS Offshore
Assuming the 90 days trading horizon Kawan Food Bhd is expected to under-perform the TAS Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Kawan Food Bhd is 3.14 times less risky than TAS Offshore. The stock trades about -0.02 of its potential returns per unit of risk. The TAS Offshore Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19.00 in TAS Offshore Bhd on September 4, 2024 and sell it today you would earn a total of 46.00 from holding TAS Offshore Bhd or generate 242.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Kawan Food Bhd vs. TAS Offshore Bhd
Performance |
| Timeline |
| Kawan Food Bhd |
| TAS Offshore Bhd |
Kawan Food and TAS Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawan Food and TAS Offshore
The main advantage of trading using opposite Kawan Food and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawan Food position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.| Kawan Food vs. British American Tobacco | Kawan Food vs. FARM FRESH BERHAD | Kawan Food vs. Oriental Food Industries |
| TAS Offshore vs. MClean Technologies Bhd | TAS Offshore vs. Kawan Food Bhd | TAS Offshore vs. Petronas Chemicals Group | TAS Offshore vs. Sunway Construction Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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