Correlation Between Malaysia Steel and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Malaysia Steel and Al Aqar 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 Malaysia Steel and Al Aqar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaysia Steel Works and Al Aqar Healthcare, you can compare the effects of market volatilities on Malaysia Steel and Al Aqar 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 Malaysia Steel with a short position of Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaysia Steel and Al Aqar.
Diversification Opportunities for Malaysia Steel and Al Aqar
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Malaysia and 5116 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare and Malaysia Steel 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 Malaysia Steel Works are associated (or correlated) with Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Malaysia Steel i.e., Malaysia Steel and Al Aqar go up and down completely randomly.
Pair Corralation between Malaysia Steel and Al Aqar
Assuming the 90 days trading horizon Malaysia Steel Works is expected to under-perform the Al Aqar. In addition to that, Malaysia Steel is 2.13 times more volatile than Al Aqar Healthcare. It trades about -0.01 of its total potential returns per unit of risk. Al Aqar Healthcare is currently generating about 0.03 per unit of volatility. If you would invest 131.00 in Al Aqar Healthcare on September 26, 2024 and sell it today you would earn a total of 2.00 from holding Al Aqar Healthcare or generate 1.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Malaysia Steel Works vs. Al Aqar Healthcare
Performance |
Timeline |
Malaysia Steel Works |
Al Aqar Healthcare |
Malaysia Steel and Al Aqar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Malaysia Steel and Al Aqar
The main advantage of trading using opposite Malaysia Steel and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaysia Steel position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.Malaysia Steel vs. Press Metal Bhd | Malaysia Steel vs. PMB Technology Bhd | Malaysia Steel vs. Pantech Group Holdings | Malaysia Steel vs. CSC Steel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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