Correlation Between MClean Technologies and Senheng New
Can any of the company-specific risk be diversified away by investing in both MClean Technologies 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 MClean Technologies and Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on MClean Technologies 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 MClean Technologies with a short position of Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Senheng New.
Diversification Opportunities for MClean Technologies and Senheng New
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MClean and Senheng is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies Bhd 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 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 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 MClean Technologies i.e., MClean Technologies and Senheng New go up and down completely randomly.
Pair Corralation between MClean Technologies and Senheng New
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to generate 2.53 times more return on investment than Senheng New. However, MClean Technologies is 2.53 times more volatile than Senheng New Retail. It trades about 0.04 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.07 per unit of risk. If you would invest 16.00 in MClean Technologies Bhd on August 31, 2024 and sell it today you would earn a total of 8.00 from holding MClean Technologies Bhd or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Senheng New Retail
Performance |
| Timeline |
| MClean Technologies Bhd |
| Senheng New Retail |
MClean Technologies and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Senheng New
The main advantage of trading using opposite MClean Technologies and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies 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.| MClean Technologies vs. PMB Technology Bhd | MClean Technologies vs. MyTech Group Bhd | MClean Technologies vs. YX Precious Metals | MClean Technologies vs. Farm Price Holdings |
| Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Bina Darulaman 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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