Correlation Between Kamdar Group and Choo Bee
Can any of the company-specific risk be diversified away by investing in both Kamdar Group and Choo Bee 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 Kamdar Group and Choo Bee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamdar Group Bhd and Choo Bee Metal, you can compare the effects of market volatilities on Kamdar Group and Choo Bee 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 Kamdar Group with a short position of Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamdar Group and Choo Bee.
Diversification Opportunities for Kamdar Group and Choo Bee
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kamdar and Choo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kamdar Group Bhd and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal and Kamdar Group 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 Kamdar Group Bhd are associated (or correlated) with Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of Kamdar Group i.e., Kamdar Group and Choo Bee go up and down completely randomly.
Pair Corralation between Kamdar Group and Choo Bee
Assuming the 90 days trading horizon Kamdar Group Bhd is expected to generate 2.24 times more return on investment than Choo Bee. However, Kamdar Group is 2.24 times more volatile than Choo Bee Metal. It trades about 0.43 of its potential returns per unit of risk. Choo Bee Metal is currently generating about -0.25 per unit of risk. If you would invest 22.00 in Kamdar Group Bhd on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Kamdar Group Bhd or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamdar Group Bhd vs. Choo Bee Metal
Performance |
| Timeline |
| Kamdar Group Bhd |
| Choo Bee Metal |
Kamdar Group and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamdar Group and Choo Bee
The main advantage of trading using opposite Kamdar Group and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamdar Group position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.| Kamdar Group vs. Malayan Banking Bhd | Kamdar Group vs. Public Bank Bhd | Kamdar Group vs. Petronas Chemicals Group | Kamdar Group vs. Tenaga Nasional 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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