Correlation Between Senheng New and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both Senheng New and Malaysia Steel 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 Senheng New and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senheng New Retail and Malaysia Steel Works, you can compare the effects of market volatilities on Senheng New and Malaysia Steel 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 Senheng New with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Malaysia Steel.
Diversification Opportunities for Senheng New and Malaysia Steel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Senheng and Malaysia is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and Senheng New 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 Senheng New Retail are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Senheng New i.e., Senheng New and Malaysia Steel go up and down completely randomly.
Pair Corralation between Senheng New and Malaysia Steel
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Malaysia Steel. In addition to that, Senheng New is 1.06 times more volatile than Malaysia Steel Works. It trades about -0.04 of its total potential returns per unit of risk. Malaysia Steel Works is currently generating about -0.01 per unit of volatility. If you would invest 35.00 in Malaysia Steel Works on September 26, 2024 and sell it today you would lose (4.00) from holding Malaysia Steel Works or give up 11.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Senheng New Retail vs. Malaysia Steel Works
Performance |
Timeline |
Senheng New Retail |
Malaysia Steel Works |
Senheng New and Malaysia Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senheng New and Malaysia Steel
The main advantage of trading using opposite Senheng New and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Malaysia Steel 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.Senheng New vs. Mr D I | Senheng New vs. Radiant Globaltech Bhd | Senheng New vs. Genetec Technology Bhd | Senheng New vs. FARM FRESH BERHAD |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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