Correlation Between Binasat Communications and IOI Bhd
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and IOI Bhd 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 IOI Bhd 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 IOI Bhd, you can compare the effects of market volatilities on Binasat Communications and IOI Bhd 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 IOI Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and IOI Bhd.
Diversification Opportunities for Binasat Communications and IOI Bhd
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and IOI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and IOI Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOI 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 IOI Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOI Bhd has no effect on the direction of Binasat Communications i.e., Binasat Communications and IOI Bhd go up and down completely randomly.
Pair Corralation between Binasat Communications and IOI Bhd
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the IOI Bhd. In addition to that, Binasat Communications is 3.38 times more volatile than IOI Bhd. It trades about -0.42 of its total potential returns per unit of risk. IOI Bhd is currently generating about -0.11 per unit of volatility. If you would invest 380.00 in IOI Bhd on October 23, 2024 and sell it today you would lose (5.00) from holding IOI Bhd or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. IOI Bhd
Performance |
| Timeline |
| Binasat Communications |
| IOI Bhd |
Binasat Communications and IOI Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and IOI Bhd
The main advantage of trading using opposite Binasat Communications and IOI Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, IOI Bhd 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 IOI Bhd will offset losses from the drop in IOI Bhd's long position.| Binasat Communications vs. Uchi Technologies Bhd | Binasat Communications vs. Oriental Food Industries | Binasat Communications vs. Public Packages Holdings | Binasat Communications vs. Dataprep Holdings Bhd |
| IOI Bhd vs. Berjaya Food Bhd | IOI Bhd vs. Oriental Food Industries | IOI Bhd vs. Binasat Communications Bhd | IOI Bhd vs. RHB Bank 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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