Correlation Between Daya Materials and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Daya Materials and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on Daya Materials and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and Resintech Bhd.
Diversification Opportunities for Daya Materials and Resintech Bhd
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daya and Resintech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Daya Materials i.e., Daya Materials and Resintech Bhd go up and down completely randomly.
Pair Corralation between Daya Materials and Resintech Bhd
Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the Resintech Bhd. In addition to that, Daya Materials is 2.53 times more volatile than Resintech Bhd. It trades about -0.02 of its total potential returns per unit of risk. Resintech Bhd is currently generating about 0.08 per unit of volatility. If you would invest 66.00 in Resintech Bhd on October 25, 2024 and sell it today you would earn a total of 4.00 from holding Resintech Bhd or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daya Materials Bhd vs. Resintech Bhd
Performance |
| Timeline |
| Daya Materials Bhd |
| Resintech Bhd |
Daya Materials and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and Resintech Bhd
The main advantage of trading using opposite Daya Materials and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| Daya Materials vs. Carlsberg Brewery Malaysia | Daya Materials vs. CPE Technology Berhad | Daya Materials vs. Central Industrial Corp | Daya Materials vs. Melewar Industrial Group |
| Resintech Bhd vs. Cloudpoint Technology Berhad | Resintech Bhd vs. MI Technovation Bhd | Resintech Bhd vs. ECM Libra Financial | Resintech Bhd vs. Sunzen Biotech 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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