Correlation Between Binasat Communications and Senheng New
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Binasat Communications and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Senheng New.
Diversification Opportunities for Binasat Communications and Senheng New
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and Senheng is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Binasat Communications i.e., Binasat Communications and Senheng New go up and down completely randomly.
Pair Corralation between Binasat Communications and Senheng New
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to generate 1.32 times more return on investment than Senheng New. However, Binasat Communications is 1.32 times more volatile than Senheng New Retail. It trades about -0.01 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.07 per unit of risk. If you would invest 31.00 in Binasat Communications Bhd on September 16, 2024 and sell it today you would lose (11.00) from holding Binasat Communications Bhd or give up 35.48% 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. Senheng New Retail
Performance |
| Timeline |
| Binasat Communications |
| Senheng New Retail |
Binasat Communications and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Senheng New
The main advantage of trading using opposite Binasat Communications and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Binasat Communications vs. Axiata Group Bhd | Binasat Communications vs. Telekom Malaysia Bhd | Binasat Communications vs. TIME Dotcom Bhd |
| Senheng New vs. Apex Healthcare Bhd | Senheng New vs. Sports Toto Berhad | Senheng New vs. YX Precious Metals | Senheng New vs. Kawan Food 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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