Correlation Between Binasat Communications and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and FGV Holdings 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 FGV Holdings 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 FGV Holdings Bhd, you can compare the effects of market volatilities on Binasat Communications and FGV Holdings 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 FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and FGV Holdings.
Diversification Opportunities for Binasat Communications and FGV Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and FGV is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings 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 FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of Binasat Communications i.e., Binasat Communications and FGV Holdings go up and down completely randomly.
Pair Corralation between Binasat Communications and FGV Holdings
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the FGV Holdings. In addition to that, Binasat Communications is 1.64 times more volatile than FGV Holdings Bhd. It trades about -0.02 of its total potential returns per unit of risk. FGV Holdings Bhd is currently generating about -0.02 per unit of volatility. If you would invest 132.00 in FGV Holdings Bhd on September 4, 2024 and sell it today you would lose (16.00) from holding FGV Holdings Bhd or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. FGV Holdings Bhd
Performance |
| Timeline |
| Binasat Communications |
| FGV Holdings Bhd |
Binasat Communications and FGV Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and FGV Holdings
The main advantage of trading using opposite Binasat Communications and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' 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 |
| FGV Holdings vs. Binasat Communications Bhd | FGV Holdings vs. DC HEALTHCARE HOLDINGS | FGV Holdings vs. Carlsberg Brewery Malaysia | FGV Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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