Correlation Between Silver Ridge and Senheng New
Can any of the company-specific risk be diversified away by investing in both Silver Ridge and Senheng New 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 Silver Ridge and Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Ridge Holdings and Senheng New Retail, you can compare the effects of market volatilities on Silver Ridge and Senheng New 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 Silver Ridge with a short position of Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Ridge and Senheng New.
Diversification Opportunities for Silver Ridge and Senheng New
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Silver and Senheng is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Silver Ridge Holdings and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail and Silver Ridge 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 Silver Ridge Holdings are associated (or correlated) with Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Silver Ridge i.e., Silver Ridge and Senheng New go up and down completely randomly.
Pair Corralation between Silver Ridge and Senheng New
Assuming the 90 days trading horizon Silver Ridge Holdings is expected to generate 1.92 times more return on investment than Senheng New. However, Silver Ridge is 1.92 times more volatile than Senheng New Retail. It trades about 0.51 of its potential returns per unit of risk. Senheng New Retail is currently generating about 0.01 per unit of risk. If you would invest 47.00 in Silver Ridge Holdings on August 30, 2024 and sell it today you would earn a total of 14.00 from holding Silver Ridge Holdings or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Ridge Holdings vs. Senheng New Retail
Performance |
| Timeline |
| Silver Ridge Holdings |
| Senheng New Retail |
Silver Ridge and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Ridge and Senheng New
The main advantage of trading using opposite Silver Ridge and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Ridge position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Silver Ridge vs. Malaysia Steel Works | Silver Ridge vs. SFP Tech Holdings | Silver Ridge vs. Lysaght Galvanized Steel | Silver Ridge vs. CSC Steel Holdings |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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