Correlation Between Binasat Communications and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Binasat Communications and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Axiata Group.
Diversification Opportunities for Binasat Communications and Axiata Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binasat and Axiata is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Binasat Communications i.e., Binasat Communications and Axiata Group go up and down completely randomly.
Pair Corralation between Binasat Communications and Axiata Group
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Axiata Group. In addition to that, Binasat Communications is 2.51 times more volatile than Axiata Group Bhd. It trades about -0.09 of its total potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.23 per unit of volatility. If you would invest 227.00 in Axiata Group Bhd on September 17, 2024 and sell it today you would earn a total of 10.00 from holding Axiata Group Bhd or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| Binasat Communications |
| Axiata Group Bhd |
Binasat Communications and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Axiata Group
The main advantage of trading using opposite Binasat Communications and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| Binasat Communications vs. Axiata Group Bhd | Binasat Communications vs. Telekom Malaysia Bhd | Binasat Communications vs. TIME Dotcom Bhd |
| Axiata Group vs. Telekom Malaysia Bhd | Axiata Group vs. TIME Dotcom Bhd | Axiata Group vs. Binasat Communications 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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