Correlation Between Rubberex M and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both Rubberex M and Kluang 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 Kluang 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 Kluang Rubber, you can compare the effects of market volatilities on Rubberex M and Kluang 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 Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Kluang Rubber.
Diversification Opportunities for Rubberex M and Kluang Rubber
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rubberex and Kluang is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber 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 Kluang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kluang Rubber has no effect on the direction of Rubberex M i.e., Rubberex M and Kluang Rubber go up and down completely randomly.
Pair Corralation between Rubberex M and Kluang Rubber
Assuming the 90 days trading horizon Rubberex M is expected to under-perform the Kluang Rubber. In addition to that, Rubberex M is 3.33 times more volatile than Kluang Rubber. It trades about -0.07 of its total potential returns per unit of risk. Kluang Rubber is currently generating about 0.07 per unit of volatility. If you would invest 575.00 in Kluang Rubber on August 27, 2024 and sell it today you would earn a total of 7.00 from holding Kluang Rubber or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubberex M vs. Kluang Rubber
Performance |
| Timeline |
| Rubberex M |
| Kluang Rubber |
Rubberex M and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubberex M and Kluang Rubber
The main advantage of trading using opposite Rubberex M and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M position performs unexpectedly, Kluang 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 Kluang Rubber will offset losses from the drop in Kluang Rubber's long position.| Rubberex M vs. Computer Forms Bhd | Rubberex M vs. Cloudpoint Technology Berhad | Rubberex M vs. Uchi Technologies Bhd | Rubberex M vs. Lotte Chemical Titan |
| Kluang Rubber vs. YX Precious Metals | Kluang Rubber vs. Al Aqar Healthcare | Kluang Rubber vs. ONETECH SOLUTIONS HOLDINGS | Kluang Rubber vs. British American Tobacco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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