Correlation Between Radiant Globaltech and Senheng New

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

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

Diversification Opportunities for Radiant Globaltech and Senheng New

0.0

Correlation Coefficient

Radiant Globaltech  Senheng New

Pay attention - limited upside

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

Pair Corralation between Radiant Globaltech and Senheng New

Assuming the 90 days trading horizon Radiant Globaltech Bhd is expected to under-perform the Senheng New. But the stock apears to be less risky and, when comparing its historical volatility, Radiant Globaltech Bhd is 1.19 times less risky than Senheng New. The stock trades about -0.06 of its potential returns per unit of risk. The Senheng New Retail is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Senheng New Retail on September 24, 2024 and sell it today you would earn a total of  4.00  from holding Senheng New Retail or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Radiant Globaltech Bhd  vs.  Senheng New Retail

Radiant Globaltech Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Senheng New Retail

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Senheng New Retail are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Senheng New may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Radiant Globaltech and Senheng New

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

The idea behind Radiant Globaltech Bhd and Senheng New Retail 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.