Correlation Between Sunzen Biotech and Insas Bhd
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and Insas 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 Sunzen Biotech and Insas Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunzen Biotech Bhd and Insas Bhd, you can compare the effects of market volatilities on Sunzen Biotech and Insas 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 Sunzen Biotech with a short position of Insas Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Insas Bhd.
Diversification Opportunities for Sunzen Biotech and Insas Bhd
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunzen and Insas is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and Insas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insas Bhd and Sunzen Biotech 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 Sunzen Biotech Bhd are associated (or correlated) with Insas Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insas Bhd has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and Insas Bhd go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Insas Bhd
Assuming the 90 days trading horizon Sunzen Biotech Bhd is expected to generate 0.45 times more return on investment than Insas Bhd. However, Sunzen Biotech Bhd is 2.21 times less risky than Insas Bhd. It trades about -0.21 of its potential returns per unit of risk. Insas Bhd is currently generating about -0.26 per unit of risk. If you would invest 33.00 in Sunzen Biotech Bhd on August 24, 2024 and sell it today you would lose (1.00) from holding Sunzen Biotech Bhd or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Insas Bhd
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Insas Bhd |
Sunzen Biotech and Insas Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Insas Bhd
The main advantage of trading using opposite Sunzen Biotech and Insas Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, Insas 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 Insas Bhd will offset losses from the drop in Insas Bhd's long position.| Sunzen Biotech vs. JF Technology BHD | Sunzen Biotech vs. EA Technique M | Sunzen Biotech vs. Oriental Food Industries | Sunzen Biotech vs. Coraza Integrated Technology |
| Insas Bhd vs. Malayan Banking Bhd | Insas Bhd vs. Public Bank Bhd | Insas Bhd vs. Petronas Chemicals Group | Insas Bhd vs. Tenaga Nasional 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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