Correlation Between OpenSys M and Fitters Diversified
Can any of the company-specific risk be diversified away by investing in both OpenSys M and Fitters Diversified 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 Fitters Diversified 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 Fitters Diversified Bhd, you can compare the effects of market volatilities on OpenSys M and Fitters Diversified 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 Fitters Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of OpenSys M and Fitters Diversified.
Diversification Opportunities for OpenSys M and Fitters Diversified
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between OpenSys and Fitters is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding OpenSys M Bhd and Fitters Diversified Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitters Diversified 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 Fitters Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitters Diversified Bhd has no effect on the direction of OpenSys M i.e., OpenSys M and Fitters Diversified go up and down completely randomly.
Pair Corralation between OpenSys M and Fitters Diversified
Assuming the 90 days trading horizon OpenSys M Bhd is expected to under-perform the Fitters Diversified. But the stock apears to be less risky and, when comparing its historical volatility, OpenSys M Bhd is 8.31 times less risky than Fitters Diversified. The stock trades about -0.03 of its potential returns per unit of risk. The Fitters Diversified Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Fitters Diversified Bhd on August 28, 2024 and sell it today you would lose (0.50) from holding Fitters Diversified Bhd or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OpenSys M Bhd vs. Fitters Diversified Bhd
Performance |
| Timeline |
| OpenSys M Bhd |
| Fitters Diversified Bhd |
OpenSys M and Fitters Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OpenSys M and Fitters Diversified
The main advantage of trading using opposite OpenSys M and Fitters Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OpenSys M position performs unexpectedly, Fitters Diversified 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 Fitters Diversified will offset losses from the drop in Fitters Diversified'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 |
| Fitters Diversified vs. Digistar Bhd | Fitters Diversified vs. Minetech Resources Bhd | Fitters Diversified vs. OpenSys M Bhd | Fitters Diversified vs. Insas 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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