Correlation Between Binasat Communications and Sanichi Technology
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Sanichi Technology 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 Sanichi Technology 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 Sanichi Technology Bhd, you can compare the effects of market volatilities on Binasat Communications and Sanichi Technology 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 Sanichi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Sanichi Technology.
Diversification Opportunities for Binasat Communications and Sanichi Technology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binasat and Sanichi is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Sanichi Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanichi Technology Bhd 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 Sanichi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanichi Technology Bhd has no effect on the direction of Binasat Communications i.e., Binasat Communications and Sanichi Technology go up and down completely randomly.
Pair Corralation between Binasat Communications and Sanichi Technology
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Sanichi Technology. But the stock apears to be less risky and, when comparing its historical volatility, Binasat Communications Bhd is 74.06 times less risky than Sanichi Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Sanichi Technology Bhd is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Sanichi Technology Bhd on October 29, 2024 and sell it today you would lose (12.00) from holding Sanichi Technology Bhd or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Sanichi Technology Bhd
Performance |
| Timeline |
| Binasat Communications |
| Sanichi Technology Bhd |
Binasat Communications and Sanichi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Sanichi Technology
The main advantage of trading using opposite Binasat Communications and Sanichi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Sanichi Technology 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 Sanichi Technology will offset losses from the drop in Sanichi Technology's long position.| Binasat Communications vs. MClean Technologies Bhd | Binasat Communications vs. Mycron Steel Bhd | Binasat Communications vs. Press Metal Bhd | Binasat Communications vs. Leader Steel Holdings |
| Sanichi Technology vs. Greatech Technology Bhd | Sanichi Technology vs. Uwc Bhd | Sanichi Technology vs. Genetec Technology Bhd | Sanichi Technology vs. PIE Industrial 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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