Correlation Between Digistar Bhd and Resintech Bhd

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

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

Diversification Opportunities for Digistar Bhd and Resintech Bhd

0.0

Correlation Coefficient

Digistar Bhd  Resintech Bhd

Pay attention - limited upside

The 3 months correlation between Digistar and Resintech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd and Digistar 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 Digistar Bhd are associated (or correlated) with Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Resintech Bhd go up and down completely randomly.

Pair Corralation between Digistar Bhd and Resintech Bhd

If you would invest  69.00  in Resintech Bhd on September 22, 2024 and sell it today you would earn a total of  1.00  from holding Resintech Bhd or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Digistar Bhd  vs.  Resintech Bhd

Digistar Bhd

Risk-Adjusted Performance

0 of 100

Weak

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

Resintech Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Resintech Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Resintech Bhd 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 Digistar Bhd and Resintech Bhd

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

The idea behind Digistar Bhd and Resintech 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.