Correlation Between Hil Industries and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both Hil Industries 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 Hil Industries and Kluang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hil Industries Bhd and Kluang Rubber, you can compare the effects of market volatilities on Hil Industries 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 Hil Industries with a short position of Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hil Industries and Kluang Rubber.
Diversification Opportunities for Hil Industries and Kluang Rubber
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hil and Kluang is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hil Industries Bhd and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber and Hil Industries 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 Hil Industries Bhd 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 Hil Industries i.e., Hil Industries and Kluang Rubber go up and down completely randomly.
Pair Corralation between Hil Industries and Kluang Rubber
Assuming the 90 days trading horizon Hil Industries Bhd is expected to under-perform the Kluang Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Hil Industries Bhd is 1.2 times less risky than Kluang Rubber. The stock trades about -0.1 of its potential returns per unit of risk. The Kluang Rubber is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 571.00 in Kluang Rubber on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Kluang Rubber or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hil Industries Bhd vs. Kluang Rubber
Performance |
| Timeline |
| Hil Industries Bhd |
| Kluang Rubber |
Hil Industries and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hil Industries and Kluang Rubber
The main advantage of trading using opposite Hil Industries and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hil Industries 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.| Hil Industries vs. Malayan Banking Bhd | Hil Industries vs. Public Bank Bhd | Hil Industries vs. Petronas Chemicals Group | Hil Industries vs. IHH Healthcare Bhd |
| Kluang Rubber vs. Mycron Steel Bhd | Kluang Rubber vs. Aurelius Technologies Bhd | Kluang Rubber vs. Riverview Rubber Estates | Kluang Rubber vs. Sunzen Biotech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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