Correlation Between SCB X and Amanah Leasing

Can any of the company-specific risk be diversified away by investing in both SCB X and Amanah Leasing 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 SCB X and Amanah Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCB X Public and Amanah Leasing Public, you can compare the effects of market volatilities on SCB X and Amanah Leasing 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 SCB X with a short position of Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Amanah Leasing.

Diversification Opportunities for SCB X and Amanah Leasing

-0.79

Correlation Coefficient

SCB X  Amanah Leasing

Pay attention - limited upside

The 3 months correlation between SCB and Amanah is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing Public and SCB X 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 SCB X Public are associated (or correlated) with Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of SCB X i.e., SCB X and Amanah Leasing go up and down completely randomly.

Pair Corralation between SCB X and Amanah Leasing

Assuming the 90 days trading horizon SCB X is expected to generate 75.86 times less return on investment than Amanah Leasing. But when comparing it to its historical volatility, SCB X Public is 82.19 times less risky than Amanah Leasing. It trades about 0.08 of its potential returns per unit of risk. Amanah Leasing Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  132.00  in Amanah Leasing Public on September 23, 2024 and sell it today you would lose (34.00) from holding Amanah Leasing Public or give up 25.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

SCB X Public  vs.  Amanah Leasing Public

SCB X Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, SCB X is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SCB X and Amanah Leasing

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

The idea behind SCB X Public and Amanah Leasing Public 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.