Correlation Between Binasat Communications and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and CB Industrial 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 CB Industrial 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 CB Industrial Product, you can compare the effects of market volatilities on Binasat Communications and CB Industrial 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 CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and CB Industrial.
Diversification Opportunities for Binasat Communications and CB Industrial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and 7076 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product 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 CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Binasat Communications i.e., Binasat Communications and CB Industrial go up and down completely randomly.
Pair Corralation between Binasat Communications and CB Industrial
Assuming the 90 days trading horizon Binasat Communications is expected to generate 2.87 times less return on investment than CB Industrial. In addition to that, Binasat Communications is 2.22 times more volatile than CB Industrial Product. It trades about 0.01 of its total potential returns per unit of risk. CB Industrial Product is currently generating about 0.09 per unit of volatility. If you would invest 128.00 in CB Industrial Product on August 31, 2024 and sell it today you would earn a total of 3.00 from holding CB Industrial Product or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. CB Industrial Product
Performance |
| Timeline |
| Binasat Communications |
| CB Industrial Product |
Binasat Communications and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and CB Industrial
The main advantage of trading using opposite Binasat Communications and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. Swift Haulage Bhd | Binasat Communications vs. Bina Darulaman Bhd |
| CB Industrial vs. Greatech Technology Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. PIE Industrial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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