Correlation Between OpenSys M and Tenaga Nasional
Can any of the company-specific risk be diversified away by investing in both OpenSys M and Tenaga Nasional 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 OpenSys M and Tenaga Nasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OpenSys M Bhd and Tenaga Nasional Bhd, you can compare the effects of market volatilities on OpenSys M and Tenaga Nasional 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 OpenSys M with a short position of Tenaga Nasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of OpenSys M and Tenaga Nasional.
Diversification Opportunities for OpenSys M and Tenaga Nasional
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OpenSys and Tenaga is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding OpenSys M Bhd and Tenaga Nasional Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaga Nasional Bhd and OpenSys 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 OpenSys M Bhd are associated (or correlated) with Tenaga Nasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaga Nasional Bhd has no effect on the direction of OpenSys M i.e., OpenSys M and Tenaga Nasional go up and down completely randomly.
Pair Corralation between OpenSys M and Tenaga Nasional
Assuming the 90 days trading horizon OpenSys M Bhd is expected to generate 1.17 times more return on investment than Tenaga Nasional. However, OpenSys M is 1.17 times more volatile than Tenaga Nasional Bhd. It trades about -0.07 of its potential returns per unit of risk. Tenaga Nasional Bhd is currently generating about -0.09 per unit of risk. If you would invest 36.00 in OpenSys M Bhd on September 12, 2024 and sell it today you would lose (1.00) from holding OpenSys M Bhd or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OpenSys M Bhd vs. Tenaga Nasional Bhd
Performance |
| Timeline |
| OpenSys M Bhd |
| Tenaga Nasional Bhd |
OpenSys M and Tenaga Nasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OpenSys M and Tenaga Nasional
The main advantage of trading using opposite OpenSys M and Tenaga Nasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OpenSys M position performs unexpectedly, Tenaga Nasional 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 Tenaga Nasional will offset losses from the drop in Tenaga Nasional's long position.| OpenSys M vs. Malayan Banking Bhd | OpenSys M vs. Public Bank Bhd | OpenSys M vs. Petronas Chemicals Group | OpenSys M vs. Tenaga Nasional Bhd |
| Tenaga Nasional vs. Digistar Bhd | Tenaga Nasional vs. Minetech Resources Bhd | Tenaga Nasional vs. AirAsia X Bhd | Tenaga Nasional vs. OpenSys M 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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