Correlation Between Malpac Holdings and M N

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

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

Diversification Opportunities for Malpac Holdings and M N

-0.33

Correlation Coefficient

Malpac Holdings  M N

Very good diversification

The 3 months correlation between Malpac and 0103 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Malpac Holdings Bhd and M N C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M N C and Malpac Holdings 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 Malpac Holdings Bhd are associated (or correlated) with M N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M N C has no effect on the direction of Malpac Holdings i.e., Malpac Holdings and M N go up and down completely randomly.

Pair Corralation between Malpac Holdings and M N

Assuming the 90 days trading horizon Malpac Holdings is expected to generate 11.33 times less return on investment than M N. But when comparing it to its historical volatility, Malpac Holdings Bhd is 1.73 times less risky than M N. It trades about 0.02 of its potential returns per unit of risk. M N C is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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 Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Malpac Holdings Bhd  vs.  M N C

Malpac Holdings Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Malpac Holdings Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Malpac Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

M N C

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in M N C are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, M N disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Malpac Holdings and M N

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

The idea behind Malpac Holdings Bhd and M N C 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.