Correlation Between Digistar Bhd and Aeon Credit
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Aeon Credit 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 Aeon Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Aeon Credit Service, you can compare the effects of market volatilities on Digistar Bhd and Aeon Credit 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 Aeon Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Aeon Credit.
Diversification Opportunities for Digistar Bhd and Aeon Credit
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Digistar and Aeon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Aeon Credit Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Credit Service 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 Aeon Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Credit Service has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Aeon Credit go up and down completely randomly.
Pair Corralation between Digistar Bhd and Aeon Credit
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 7.64 times more return on investment than Aeon Credit. However, Digistar Bhd is 7.64 times more volatile than Aeon Credit Service. It trades about 0.03 of its potential returns per unit of risk. Aeon Credit Service is currently generating about -0.16 per unit of risk. If you would invest 5.50 in Digistar Bhd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Digistar Bhd or generate 0.0% 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. Aeon Credit Service
Performance |
| Timeline |
| Digistar Bhd |
| Aeon Credit Service |
Digistar Bhd and Aeon Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Aeon Credit
The main advantage of trading using opposite Digistar Bhd and Aeon Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Aeon Credit 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 Aeon Credit will offset losses from the drop in Aeon Credit's long position.| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Tenaga Nasional Bhd |
| Aeon Credit vs. Press Metal Bhd | Aeon Credit vs. Malayan Banking Bhd | Aeon Credit vs. Cengild Medical Berhad | Aeon Credit vs. Public Bank Bhd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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