Correlation Between Rubberex M and Lotus KFM
Can any of the company-specific risk be diversified away by investing in both Rubberex M and Lotus KFM 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 Lotus KFM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and Lotus KFM Bhd, you can compare the effects of market volatilities on Rubberex M and Lotus KFM 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 Lotus KFM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Lotus KFM.
Diversification Opportunities for Rubberex M and Lotus KFM
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rubberex and Lotus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M and Lotus KFM Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus KFM 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 Lotus KFM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus KFM Bhd has no effect on the direction of Rubberex M i.e., Rubberex M and Lotus KFM go up and down completely randomly.
Pair Corralation between Rubberex M and Lotus KFM
Assuming the 90 days trading horizon Rubberex M is expected to generate 1.08 times more return on investment than Lotus KFM. However, Rubberex M is 1.08 times more volatile than Lotus KFM Bhd. It trades about 0.01 of its potential returns per unit of risk. Lotus KFM Bhd is currently generating about -0.37 per unit of risk. If you would invest 18.00 in Rubberex M on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Rubberex M or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubberex M vs. Lotus KFM Bhd
Performance |
| Timeline |
| Rubberex M |
| Lotus KFM Bhd |
Rubberex M and Lotus KFM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubberex M and Lotus KFM
The main advantage of trading using opposite Rubberex M and Lotus KFM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M position performs unexpectedly, Lotus KFM 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 Lotus KFM will offset losses from the drop in Lotus KFM's long position.| Rubberex M vs. ES Ceramics Technology | Rubberex M vs. Dnonce Tech Bhd | Rubberex M vs. Duopharma Biotech Bhd | Rubberex M vs. Cloudpoint Technology Berhad |
| Lotus KFM vs. Silver Ridge Holdings | Lotus KFM vs. Minetech Resources Bhd | Lotus KFM vs. CSC Steel Holdings | Lotus KFM vs. Rubberex M |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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