Correlation Between Malayan Banking and Scientex Bhd
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Scientex 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 Malayan Banking and Scientex Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malayan Banking Bhd and Scientex Bhd, you can compare the effects of market volatilities on Malayan Banking and Scientex 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 Malayan Banking with a short position of Scientex Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Scientex Bhd.
Diversification Opportunities for Malayan Banking and Scientex Bhd
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malayan and Scientex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Scientex Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientex Bhd and Malayan Banking 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 Malayan Banking Bhd are associated (or correlated) with Scientex Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientex Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Scientex Bhd go up and down completely randomly.
Pair Corralation between Malayan Banking and Scientex Bhd
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to under-perform the Scientex Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Malayan Banking Bhd is 1.94 times less risky than Scientex Bhd. The stock trades about -0.14 of its potential returns per unit of risk. The Scientex Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 419.00 in Scientex Bhd on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Scientex Bhd or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Malayan Banking Bhd vs. Scientex Bhd
Performance |
Timeline |
Malayan Banking Bhd |
Scientex Bhd |
Malayan Banking and Scientex Bhd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Malayan Banking and Scientex Bhd
The main advantage of trading using opposite Malayan Banking and Scientex Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Scientex 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 Scientex Bhd will offset losses from the drop in Scientex Bhd's long position.Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. RHB Bank Bhd | Malayan Banking vs. Genetec Technology Bhd |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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