Correlation Between Systech Bhd and Nexgram Holdings
Can any of the company-specific risk be diversified away by investing in both Systech Bhd and Nexgram Holdings 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 Systech Bhd and Nexgram Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systech Bhd and Nexgram Holdings Bhd, you can compare the effects of market volatilities on Systech Bhd and Nexgram Holdings 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 Systech Bhd with a short position of Nexgram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systech Bhd and Nexgram Holdings.
Diversification Opportunities for Systech Bhd and Nexgram Holdings
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systech and Nexgram is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Systech Bhd and Nexgram Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgram Holdings Bhd and Systech 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 Systech Bhd are associated (or correlated) with Nexgram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexgram Holdings Bhd has no effect on the direction of Systech Bhd i.e., Systech Bhd and Nexgram Holdings go up and down completely randomly.
Pair Corralation between Systech Bhd and Nexgram Holdings
Assuming the 90 days trading horizon Systech Bhd is expected to under-perform the Nexgram Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Systech Bhd is 8.23 times less risky than Nexgram Holdings. The stock trades about -0.26 of its potential returns per unit of risk. The Nexgram Holdings Bhd is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Nexgram Holdings Bhd on November 8, 2024 and sell it today you would earn a total of 0.50 from holding Nexgram Holdings Bhd or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systech Bhd vs. Nexgram Holdings Bhd
Performance |
| Timeline |
| Systech Bhd |
| Nexgram Holdings Bhd |
Systech Bhd and Nexgram Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systech Bhd and Nexgram Holdings
The main advantage of trading using opposite Systech Bhd and Nexgram Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systech Bhd position performs unexpectedly, Nexgram Holdings 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 Nexgram Holdings will offset losses from the drop in Nexgram Holdings' long position.| Systech Bhd vs. Dufu Tech Corp | Systech Bhd vs. Apex Healthcare Bhd | Systech Bhd vs. Tex Cycle Technology | Systech Bhd vs. Sunzen Biotech Bhd |
| Nexgram Holdings vs. BP Plastics Holding | Nexgram Holdings vs. CSC Steel Holdings | Nexgram Holdings vs. Kluang Rubber | Nexgram Holdings vs. Binasat Communications 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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