Correlation Between Systech Bhd and Rubberex M

Can any of the company-specific risk be diversified away by investing in both Systech Bhd and Rubberex M 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 Systech Bhd and Rubberex M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Systech Bhd and Rubberex M, you can compare the effects of market volatilities on Systech Bhd and Rubberex M 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 Systech Bhd with a short position of Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systech Bhd and Rubberex M.

Diversification Opportunities for Systech Bhd and Rubberex M

0.09

Correlation Coefficient

Systech Bhd  Rubberex M

Significant diversification

The 3 months correlation between Systech and Rubberex is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Systech Bhd and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M and Systech Bhd 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 Systech Bhd are associated (or correlated) with Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Systech Bhd i.e., Systech Bhd and Rubberex M go up and down completely randomly.

Pair Corralation between Systech Bhd and Rubberex M

Assuming the 90 days trading horizon Systech Bhd is expected to under-perform the Rubberex M. In addition to that, Systech Bhd is 1.19 times more volatile than Rubberex M. It trades about -0.22 of its total potential returns per unit of risk. Rubberex M is currently generating about 0.02 per unit of volatility. If you would invest  18.00  in Rubberex M on October 27, 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

Systech Bhd  vs.  Rubberex M

Systech Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Systech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Systech Bhd is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Rubberex M

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubberex M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Rubberex M is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Systech Bhd and Rubberex M

The main advantage of trading using opposite Systech Bhd and Rubberex M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systech Bhd position performs unexpectedly, Rubberex M 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 Rubberex M will offset losses from the drop in Rubberex M's long position.

The idea behind Systech Bhd and Rubberex M pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.