Correlation Between Eversafe Rubber and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both Eversafe Rubber and FGV Holdings 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 Eversafe Rubber and FGV Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eversafe Rubber Bhd and FGV Holdings Bhd, you can compare the effects of market volatilities on Eversafe Rubber and FGV Holdings 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 Eversafe Rubber with a short position of FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eversafe Rubber and FGV Holdings.
Diversification Opportunities for Eversafe Rubber and FGV Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eversafe and FGV is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eversafe Rubber Bhd and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings Bhd and Eversafe Rubber 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 Eversafe Rubber Bhd are associated (or correlated) with FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of Eversafe Rubber i.e., Eversafe Rubber and FGV Holdings go up and down completely randomly.
Pair Corralation between Eversafe Rubber and FGV Holdings
Assuming the 90 days trading horizon Eversafe Rubber Bhd is expected to under-perform the FGV Holdings. In addition to that, Eversafe Rubber is 3.44 times more volatile than FGV Holdings Bhd. It trades about -0.04 of its total potential returns per unit of risk. FGV Holdings Bhd is currently generating about 0.03 per unit of volatility. If you would invest 108.00 in FGV Holdings Bhd on September 26, 2024 and sell it today you would earn a total of 2.00 from holding FGV Holdings Bhd or generate 1.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eversafe Rubber Bhd vs. FGV Holdings Bhd
Performance |
Timeline |
Eversafe Rubber Bhd |
FGV Holdings Bhd |
Eversafe Rubber and FGV Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eversafe Rubber and FGV Holdings
The main advantage of trading using opposite Eversafe Rubber and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eversafe Rubber position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' long position.Eversafe Rubber vs. Sapura Industrial Bhd | Eversafe Rubber vs. Nexgram Holdings Bhd | Eversafe Rubber vs. ViTrox Bhd | Eversafe Rubber vs. ECS ICT Bhd |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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