Correlation Between ITMAX System and Genting Malaysia

Can any of the company-specific risk be diversified away by investing in both ITMAX System and Genting Malaysia 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 ITMAX System and Genting Malaysia into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for ITMAX System and Genting Malaysia

0.15

Correlation Coefficient

ITMAX System  Genting Malaysia

Average diversification

The 3 months correlation between ITMAX and Genting is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ITMAX System Berhad and Genting Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genting Malaysia Bhd and ITMAX System 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 ITMAX System Berhad are associated (or correlated) with Genting Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genting Malaysia Bhd has no effect on the direction of ITMAX System i.e., ITMAX System and Genting Malaysia go up and down completely randomly.

Pair Corralation between ITMAX System and Genting Malaysia

Assuming the 90 days trading horizon ITMAX System Berhad is expected to generate 1.09 times more return on investment than Genting Malaysia. However, ITMAX System is 1.09 times more volatile than Genting Malaysia Bhd. It trades about -0.02 of its potential returns per unit of risk. Genting Malaysia Bhd is currently generating about -0.08 per unit of risk. If you would invest  360.00  in ITMAX System Berhad on September 28, 2024 and sell it today you would lose (8.00) from holding ITMAX System Berhad or give up 2.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

ITMAX System Berhad  vs.  Genting Malaysia Bhd

ITMAX System Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

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

Genting Malaysia Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genting Malaysia Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with ITMAX System and Genting Malaysia

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

The idea behind ITMAX System Berhad and Genting Malaysia Bhd 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..