Correlation Between Rubberex M and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Rubberex M and Eversafe Rubber 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 Rubberex M and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Rubberex M and Eversafe Rubber 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 Rubberex M with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Eversafe Rubber.
Diversification Opportunities for Rubberex M and Eversafe Rubber
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rubberex and Eversafe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Rubberex M 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 Rubberex M are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Rubberex M i.e., Rubberex M and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Rubberex M and Eversafe Rubber
Assuming the 90 days trading horizon Rubberex M is expected to under-perform the Eversafe Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Rubberex M is 1.1 times less risky than Eversafe Rubber. The stock trades about -0.02 of its potential returns per unit of risk. The Eversafe Rubber Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Eversafe Rubber Bhd on September 3, 2024 and sell it today you would lose (4.00) from holding Eversafe Rubber Bhd or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubberex M vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Rubberex M |
| Eversafe Rubber Bhd |
Rubberex M and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubberex M and Eversafe Rubber
The main advantage of trading using opposite Rubberex M and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M position performs unexpectedly, Eversafe Rubber 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Rubberex M vs. Kossan Rubber Industries | Rubberex M vs. Minetech Resources Bhd | Rubberex M vs. Swift Haulage Bhd | Rubberex M vs. Insas Bhd |
| Eversafe Rubber vs. Minetech Resources Bhd | Eversafe Rubber vs. Swift Haulage Bhd | Eversafe Rubber vs. Insas Bhd | Eversafe Rubber 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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