Correlation Between Riverview Rubber and Feytech Holdings

Can any of the company-specific risk be diversified away by investing in both Riverview Rubber and Feytech 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 Riverview Rubber and Feytech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Riverview Rubber Estates and Feytech Holdings Berhad, you can compare the effects of market volatilities on Riverview Rubber and Feytech 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 Riverview Rubber with a short position of Feytech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riverview Rubber and Feytech Holdings.

Diversification Opportunities for Riverview Rubber and Feytech Holdings

0.83

Correlation Coefficient

Riverview Rubber  Feytech Holdings

Very poor diversification

The 3 months correlation between Riverview and Feytech is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Riverview Rubber Estates and Feytech Holdings Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feytech Holdings Berhad and Riverview 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 Riverview Rubber Estates are associated (or correlated) with Feytech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feytech Holdings Berhad has no effect on the direction of Riverview Rubber i.e., Riverview Rubber and Feytech Holdings go up and down completely randomly.

Pair Corralation between Riverview Rubber and Feytech Holdings

Assuming the 90 days trading horizon Riverview Rubber Estates is expected to generate 0.81 times more return on investment than Feytech Holdings. However, Riverview Rubber Estates is 1.24 times less risky than Feytech Holdings. It trades about -0.06 of its potential returns per unit of risk. Feytech Holdings Berhad is currently generating about -0.25 per unit of risk. If you would invest  315.00  in Riverview Rubber Estates on December 25, 2024 and sell it today you would lose (30.00) from holding Riverview Rubber Estates or give up 9.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.31%
Values	Daily Returns

Riverview Rubber Estates  vs.  Feytech Holdings Berhad

Riverview Rubber Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Riverview Rubber Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Feytech Holdings Berhad

Risk-Adjusted Performance

Very Weak

Over the last 90 days Feytech Holdings Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Riverview Rubber and Feytech Holdings

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

The idea behind Riverview Rubber Estates and Feytech Holdings Berhad 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.