Correlation Between Digistar Bhd and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Binasat Communications 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 Digistar Bhd and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Digistar Bhd and Binasat Communications 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 Digistar Bhd with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Binasat Communications.
Diversification Opportunities for Digistar Bhd and Binasat Communications
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digistar and Binasat is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Binasat Communications go up and down completely randomly.
Pair Corralation between Digistar Bhd and Binasat Communications
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 2.18 times more return on investment than Binasat Communications. However, Digistar Bhd is 2.18 times more volatile than Binasat Communications Bhd. It trades about 0.09 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about 0.09 per unit of risk. If you would invest 5.50 in Digistar Bhd on August 30, 2024 and sell it today you would earn a total of 0.50 from holding Digistar Bhd or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| Digistar Bhd |
| Binasat Communications |
Digistar Bhd and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Binasat Communications
The main advantage of trading using opposite Digistar Bhd and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. IHH Healthcare Bhd |
| Binasat Communications vs. Duopharma Biotech Bhd | Binasat Communications vs. ES Ceramics Technology | Binasat Communications vs. Uchi Technologies Bhd | Binasat Communications vs. Oriental Food Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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