Correlation Between Binasat Communications and Hong Leong
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Hong Leong 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 Hong Leong 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 Hong Leong Bank, you can compare the effects of market volatilities on Binasat Communications and Hong Leong 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 Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Hong Leong.
Diversification Opportunities for Binasat Communications and Hong Leong
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and Hong is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank 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 Hong Leong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Leong Bank has no effect on the direction of Binasat Communications i.e., Binasat Communications and Hong Leong go up and down completely randomly.
Pair Corralation between Binasat Communications and Hong Leong
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Hong Leong. In addition to that, Binasat Communications is 3.17 times more volatile than Hong Leong Bank. It trades about -0.22 of its total potential returns per unit of risk. Hong Leong Bank is currently generating about -0.12 per unit of volatility. If you would invest 2,044 in Hong Leong Bank on October 16, 2024 and sell it today you would lose (34.00) from holding Hong Leong Bank or give up 1.66% 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. Hong Leong Bank
Performance |
| Timeline |
| Binasat Communications |
| Hong Leong Bank |
Binasat Communications and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Hong Leong
The main advantage of trading using opposite Binasat Communications and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Hong Leong 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 Hong Leong will offset losses from the drop in Hong Leong's long position.| Binasat Communications vs. IHH Healthcare Bhd | Binasat Communications vs. YTL Hospitality REIT | Binasat Communications vs. Hong Leong Bank | Binasat Communications vs. Melewar Industrial Group |
| Hong Leong vs. Systech Bhd | Hong Leong vs. Binasat Communications Bhd | Hong Leong vs. IHH Healthcare Bhd | Hong Leong vs. Tex Cycle Technology |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |