Correlation Between Eversafe Rubber and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Eversafe Rubber and Malayan Banking 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 Eversafe Rubber and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eversafe Rubber Bhd and Malayan Banking Bhd, you can compare the effects of market volatilities on Eversafe Rubber and Malayan Banking 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 Eversafe Rubber with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eversafe Rubber and Malayan Banking.
Diversification Opportunities for Eversafe Rubber and Malayan Banking
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eversafe and Malayan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eversafe Rubber Bhd and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd and Eversafe Rubber 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 Eversafe Rubber Bhd are associated (or correlated) with Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Eversafe Rubber i.e., Eversafe Rubber and Malayan Banking go up and down completely randomly.
Pair Corralation between Eversafe Rubber and Malayan Banking
Assuming the 90 days trading horizon Eversafe Rubber Bhd is expected to under-perform the Malayan Banking. In addition to that, Eversafe Rubber is 7.0 times more volatile than Malayan Banking Bhd. It trades about -0.06 of its total potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.13 per unit of volatility. If you would invest 1,054 in Malayan Banking Bhd on September 13, 2024 and sell it today you would lose (42.00) from holding Malayan Banking Bhd or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eversafe Rubber Bhd vs. Malayan Banking Bhd
Performance |
| Timeline |
| Eversafe Rubber Bhd |
| Malayan Banking Bhd |
Eversafe Rubber and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eversafe Rubber and Malayan Banking
The main advantage of trading using opposite Eversafe Rubber and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eversafe Rubber position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| Eversafe Rubber vs. Sapura Industrial Bhd | Eversafe Rubber vs. Al Aqar Healthcare | Eversafe Rubber vs. PMB Technology Bhd | Eversafe Rubber vs. Digistar Bhd |
| Malayan Banking vs. DC HEALTHCARE HOLDINGS | Malayan Banking vs. Eversafe Rubber Bhd | Malayan Banking vs. Binasat Communications Bhd | Malayan Banking vs. BP Plastics Holding |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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