Correlation Between Choo Bee and OSK Holdings

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

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

Diversification Opportunities for Choo Bee and OSK Holdings

-0.46

Correlation Coefficient

Choo Bee  OSK Holdings

Very good diversification

The 3 months correlation between Choo and OSK is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and OSK Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSK Holdings Bhd and Choo Bee 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 Choo Bee Metal are associated (or correlated) with OSK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSK Holdings Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and OSK Holdings go up and down completely randomly.

Pair Corralation between Choo Bee and OSK Holdings

Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the OSK Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.06 times less risky than OSK Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The OSK Holdings Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  174.00  in OSK Holdings Bhd on December 22, 2024 and sell it today you would earn a total of  5.00  from holding OSK Holdings Bhd or generate 2.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Choo Bee Metal  vs.  OSK Holdings Bhd

Choo Bee Metal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Choo Bee Metal 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.

OSK Holdings Bhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OSK Holdings Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, OSK Holdings 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 Choo Bee and OSK Holdings

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

The idea behind Choo Bee Metal and OSK Holdings Bhd 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.