Correlation Between M N and OSK Holdings
Can any of the company-specific risk be diversified away by investing in both M N 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 M N and OSK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M N C and OSK Holdings Bhd, you can compare the effects of market volatilities on M N 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 M N with a short position of OSK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of M N and OSK Holdings.
Diversification Opportunities for M N and OSK Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 0103 and OSK is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding M N C 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 M N 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 M N C 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 M N i.e., M N and OSK Holdings go up and down completely randomly.
Pair Corralation between M N and OSK Holdings
Assuming the 90 days trading horizon M N C is expected to generate 6.28 times more return on investment than OSK Holdings. However, M N is 6.28 times more volatile than OSK Holdings Bhd. It trades about 0.1 of its potential returns per unit of risk. OSK Holdings Bhd is currently generating about 0.11 per unit of risk. If you would invest 8.00 in M N C on September 25, 2024 and sell it today you would earn a total of 3.00 from holding M N C or generate 37.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
M N C vs. OSK Holdings Bhd
Performance |
Timeline |
M N C |
OSK Holdings Bhd |
M N and OSK Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with M N and OSK Holdings
The main advantage of trading using opposite M N and OSK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M N 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.M N vs. K One Technology Bhd | M N vs. YTL Hospitality REIT | M N vs. Press Metal Bhd | M N vs. Farm Price Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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