Correlation Between Techbond Group and Ancom Berhad

Can any of the company-specific risk be diversified away by investing in both Techbond Group and Ancom Berhad 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 Techbond Group and Ancom Berhad into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Techbond Group Bhd and Ancom Berhad, you can compare the effects of market volatilities on Techbond Group and Ancom Berhad 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 Techbond Group with a short position of Ancom Berhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techbond Group and Ancom Berhad.

Diversification Opportunities for Techbond Group and Ancom Berhad

-0.13

Correlation Coefficient

Techbond Group  Ancom Berhad

Good diversification

The 3 months correlation between Techbond and Ancom is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Techbond Group Bhd and Ancom Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancom Berhad and Techbond Group 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 Techbond Group Bhd are associated (or correlated) with Ancom Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancom Berhad has no effect on the direction of Techbond Group i.e., Techbond Group and Ancom Berhad go up and down completely randomly.

Pair Corralation between Techbond Group and Ancom Berhad

Assuming the 90 days trading horizon Techbond Group Bhd is expected to under-perform the Ancom Berhad. In addition to that, Techbond Group is 1.28 times more volatile than Ancom Berhad. It trades about -0.04 of its total potential returns per unit of risk. Ancom Berhad is currently generating about -0.02 per unit of volatility. If you would invest  101.00  in Ancom Berhad on September 14, 2024 and sell it today you would lose (2.00) from holding Ancom Berhad or give up 1.98% of portfolio value over 90 days.

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

Techbond Group Bhd  vs.  Ancom Berhad

Techbond Group Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ancom Berhad

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Techbond Group and Ancom Berhad

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

The idea behind Techbond Group Bhd and Ancom Berhad 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.