Correlation Between Daya Materials and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Daya Materials 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 Daya Materials and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daya Materials Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Daya Materials 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 Daya Materials with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and Binasat Communications.
Diversification Opportunities for Daya Materials and Binasat Communications
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daya and Binasat is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials 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 Daya Materials 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 Daya Materials 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 Daya Materials i.e., Daya Materials and Binasat Communications go up and down completely randomly.
Pair Corralation between Daya Materials and Binasat Communications
Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the Binasat Communications. In addition to that, Daya Materials is 1.5 times more volatile than Binasat Communications Bhd. It trades about -0.08 of its total potential returns per unit of risk. Binasat Communications Bhd is currently generating about 0.01 per unit of volatility. If you would invest 21.00 in Binasat Communications Bhd on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Binasat Communications Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Daya Materials Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| Daya Materials Bhd |
| Binasat Communications |
Daya Materials and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and Binasat Communications
The main advantage of trading using opposite Daya Materials and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials 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.| Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd | Daya Materials vs. Swift Haulage Bhd |
| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. Swift Haulage Bhd | Binasat Communications vs. Bina Darulaman 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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