Correlation Between Binasat Communications and Supercomnet Technologies
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Supercomnet Technologies 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 Binasat Communications and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on Binasat Communications and Supercomnet Technologies 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 Binasat Communications with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Supercomnet Technologies.
Diversification Opportunities for Binasat Communications and Supercomnet Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Binasat and Supercomnet is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of Binasat Communications i.e., Binasat Communications and Supercomnet Technologies go up and down completely randomly.
Pair Corralation between Binasat Communications and Supercomnet Technologies
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Supercomnet Technologies. In addition to that, Binasat Communications is 1.56 times more volatile than Supercomnet Technologies Bhd. It trades about -0.02 of its total potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about 0.02 per unit of volatility. If you would invest 120.00 in Supercomnet Technologies Bhd on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Supercomnet Technologies Bhd or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Supercomnet Technologies Bhd
Performance |
| Timeline |
| Binasat Communications |
| Supercomnet Technologies |
Binasat Communications and Supercomnet Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Supercomnet Technologies
The main advantage of trading using opposite Binasat Communications and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.| Binasat Communications vs. Telekom Malaysia Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. Swift Haulage Bhd | Binasat Communications vs. Insas 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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