Correlation Between Lotus KFM and Press Metal
Can any of the company-specific risk be diversified away by investing in both Lotus KFM and Press Metal 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 Lotus KFM and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus KFM Bhd and Press Metal Bhd, you can compare the effects of market volatilities on Lotus KFM and Press Metal 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 Lotus KFM with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus KFM and Press Metal.
Diversification Opportunities for Lotus KFM and Press Metal
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotus and Press is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lotus KFM Bhd and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal Bhd and Lotus KFM 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 Lotus KFM Bhd are associated (or correlated) with Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of Lotus KFM i.e., Lotus KFM and Press Metal go up and down completely randomly.
Pair Corralation between Lotus KFM and Press Metal
Assuming the 90 days trading horizon Lotus KFM Bhd is expected to under-perform the Press Metal. In addition to that, Lotus KFM is 1.09 times more volatile than Press Metal Bhd. It trades about -0.37 of its total potential returns per unit of risk. Press Metal Bhd is currently generating about 0.0 per unit of volatility. If you would invest 473.00 in Press Metal Bhd on August 30, 2024 and sell it today you would lose (3.00) from holding Press Metal Bhd or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lotus KFM Bhd vs. Press Metal Bhd
Performance |
| Timeline |
| Lotus KFM Bhd |
| Press Metal Bhd |
Lotus KFM and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus KFM and Press Metal
The main advantage of trading using opposite Lotus KFM and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus KFM position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.| Lotus KFM vs. Silver Ridge Holdings | Lotus KFM vs. Minetech Resources Bhd | Lotus KFM vs. CSC Steel Holdings | Lotus KFM vs. Rubberex M |
| Press Metal vs. Diversified Gateway Solutions | Press Metal vs. YX Precious Metals | Press Metal vs. K One Technology Bhd | Press Metal vs. Computer Forms 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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