Correlation Between Advance Information and Sapura Industrial
Can any of the company-specific risk be diversified away by investing in both Advance Information and Sapura Industrial 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 Advance Information and Sapura Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Information Marketing and Sapura Industrial Bhd, you can compare the effects of market volatilities on Advance Information and Sapura Industrial 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 Advance Information with a short position of Sapura Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Information and Sapura Industrial.
Diversification Opportunities for Advance Information and Sapura Industrial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advance and Sapura is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advance Information Marketing and Sapura Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapura Industrial Bhd and Advance Information 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 Advance Information Marketing are associated (or correlated) with Sapura Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapura Industrial Bhd has no effect on the direction of Advance Information i.e., Advance Information and Sapura Industrial go up and down completely randomly.
Pair Corralation between Advance Information and Sapura Industrial
Assuming the 90 days trading horizon Advance Information Marketing is expected to generate 2.88 times more return on investment than Sapura Industrial. However, Advance Information is 2.88 times more volatile than Sapura Industrial Bhd. It trades about 0.04 of its potential returns per unit of risk. Sapura Industrial Bhd is currently generating about 0.03 per unit of risk. If you would invest 15.00 in Advance Information Marketing on November 5, 2024 and sell it today you would lose (8.00) from holding Advance Information Marketing or give up 53.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.13% |
| Values | Daily Returns |
Advance Information Marketing vs. Sapura Industrial Bhd
Performance |
| Timeline |
| Advance Information |
| Sapura Industrial Bhd |
Advance Information and Sapura Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Information and Sapura Industrial
The main advantage of trading using opposite Advance Information and Sapura Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Information position performs unexpectedly, Sapura Industrial 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 Sapura Industrial will offset losses from the drop in Sapura Industrial's long position.| Advance Information vs. ES Ceramics Technology | Advance Information vs. Awanbiru Technology Bhd | Advance Information vs. Computer Forms Bhd | Advance Information vs. Uchi Technologies Bhd |
| Sapura Industrial vs. Radiant Globaltech Bhd | Sapura Industrial vs. MI Technovation Bhd | Sapura Industrial vs. Resintech Bhd | Sapura Industrial vs. KPJ Healthcare 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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