Correlation Between MClean Technologies and Batu Kawan
Can any of the company-specific risk be diversified away by investing in both MClean Technologies and Batu Kawan 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 MClean Technologies and Batu Kawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MClean Technologies Bhd and Batu Kawan Bhd, you can compare the effects of market volatilities on MClean Technologies and Batu Kawan 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 MClean Technologies with a short position of Batu Kawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Batu Kawan.
Diversification Opportunities for MClean Technologies and Batu Kawan
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MClean and Batu is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies Bhd and Batu Kawan Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batu Kawan Bhd and MClean Technologies 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 MClean Technologies Bhd are associated (or correlated) with Batu Kawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batu Kawan Bhd has no effect on the direction of MClean Technologies i.e., MClean Technologies and Batu Kawan go up and down completely randomly.
Pair Corralation between MClean Technologies and Batu Kawan
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to under-perform the Batu Kawan. In addition to that, MClean Technologies is 8.43 times more volatile than Batu Kawan Bhd. It trades about -0.06 of its total potential returns per unit of risk. Batu Kawan Bhd is currently generating about 0.05 per unit of volatility. If you would invest 1,988 in Batu Kawan Bhd on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Batu Kawan Bhd or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Batu Kawan Bhd
Performance |
| Timeline |
| MClean Technologies Bhd |
| Batu Kawan Bhd |
MClean Technologies and Batu Kawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Batu Kawan
The main advantage of trading using opposite MClean Technologies and Batu Kawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies position performs unexpectedly, Batu Kawan 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 Batu Kawan will offset losses from the drop in Batu Kawan's long position.| MClean Technologies vs. PMB Technology Bhd | MClean Technologies vs. MyTech Group Bhd | MClean Technologies vs. YX Precious Metals | MClean Technologies vs. Farm Price Holdings |
| Batu Kawan vs. Southern Steel Bhd | Batu Kawan vs. MClean Technologies Bhd | Batu Kawan vs. Press Metal Bhd | Batu Kawan vs. Public Packages Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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