Correlation Between Binasat Communications and Silver Ridge
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Silver Ridge 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 Silver Ridge 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 Silver Ridge Holdings, you can compare the effects of market volatilities on Binasat Communications and Silver Ridge 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 Silver Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Silver Ridge.
Diversification Opportunities for Binasat Communications and Silver Ridge
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Binasat and Silver is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Silver Ridge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Ridge Holdings 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 Silver Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Ridge Holdings has no effect on the direction of Binasat Communications i.e., Binasat Communications and Silver Ridge go up and down completely randomly.
Pair Corralation between Binasat Communications and Silver Ridge
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Silver Ridge. But the stock apears to be less risky and, when comparing its historical volatility, Binasat Communications Bhd is 1.84 times less risky than Silver Ridge. The stock trades about -0.09 of its potential returns per unit of risk. The Silver Ridge Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Silver Ridge Holdings on November 28, 2024 and sell it today you would lose (4.00) from holding Silver Ridge Holdings or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Silver Ridge Holdings
Performance |
| Timeline |
| Binasat Communications |
| Silver Ridge Holdings |
Binasat Communications and Silver Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Silver Ridge
The main advantage of trading using opposite Binasat Communications and Silver Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Silver Ridge 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 Silver Ridge will offset losses from the drop in Silver Ridge's long position.| Binasat Communications vs. Malayan Banking Bhd | Binasat Communications vs. Oriental Food Industries | Binasat Communications vs. ECM Libra Financial | Binasat Communications vs. Apollo Food Holdings |
| Silver Ridge vs. Riverview Rubber Estates | Silver Ridge vs. Petronas Chemicals Group | Silver Ridge vs. Public Bank Bhd | Silver Ridge vs. YX Precious Metals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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