Correlation Between Rubberex M and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Rubberex M and Malayan Banking 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 Rubberex M and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and Malayan Banking Bhd, you can compare the effects of market volatilities on Rubberex M and Malayan Banking 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 Rubberex M with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Malayan Banking.
Diversification Opportunities for Rubberex M and Malayan Banking
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rubberex and Malayan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd and Rubberex M 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 Rubberex M are associated (or correlated) with Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Rubberex M i.e., Rubberex M and Malayan Banking go up and down completely randomly.
Pair Corralation between Rubberex M and Malayan Banking
Assuming the 90 days trading horizon Rubberex M is expected to under-perform the Malayan Banking. In addition to that, Rubberex M is 5.23 times more volatile than Malayan Banking Bhd. It trades about -0.03 of its total potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.12 per unit of volatility. If you would invest 1,066 in Malayan Banking Bhd on September 15, 2024 and sell it today you would lose (52.00) from holding Malayan Banking Bhd or give up 4.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Rubberex M vs. Malayan Banking Bhd
Performance |
Timeline |
Rubberex M |
Malayan Banking Bhd |
Rubberex M and Malayan Banking Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rubberex M and Malayan Banking
The main advantage of trading using opposite Rubberex M and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.Rubberex M vs. Kossan Rubber Industries | Rubberex M vs. Al Aqar Healthcare | Rubberex M vs. PMB Technology Bhd | Rubberex M vs. Digistar Bhd |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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