Correlation Between Binasat Communications and Rubberex M
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Rubberex M 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 Rubberex M 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 Rubberex M, you can compare the effects of market volatilities on Binasat Communications and Rubberex M 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 Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Rubberex M.
Diversification Opportunities for Binasat Communications and Rubberex M
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Binasat and Rubberex is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M 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 Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Binasat Communications i.e., Binasat Communications and Rubberex M go up and down completely randomly.
Pair Corralation between Binasat Communications and Rubberex M
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to generate 1.1 times more return on investment than Rubberex M. However, Binasat Communications is 1.1 times more volatile than Rubberex M. It trades about 0.09 of its potential returns per unit of risk. Rubberex M is currently generating about 0.01 per unit of risk. If you would invest 20.00 in Binasat Communications Bhd on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Binasat Communications Bhd or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Rubberex M
Performance |
| Timeline |
| Binasat Communications |
| Rubberex M |
Binasat Communications and Rubberex M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Rubberex M
The main advantage of trading using opposite Binasat Communications and Rubberex M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Rubberex M 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 Rubberex M will offset losses from the drop in Rubberex M's long position.| Binasat Communications vs. Duopharma Biotech Bhd | Binasat Communications vs. ES Ceramics Technology | Binasat Communications vs. Uchi Technologies Bhd | Binasat Communications vs. Oriental Food Industries |
| Rubberex M vs. ES Ceramics Technology | Rubberex M vs. Dnonce Tech Bhd | Rubberex M vs. Duopharma Biotech Bhd | Rubberex M vs. Cloudpoint Technology Berhad |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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