Correlation Between Binasat Communications and Central Industrial
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Central 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 Central 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 Central Industrial Corp, you can compare the effects of market volatilities on Binasat Communications and Central 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 Central Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Central Industrial.
Diversification Opportunities for Binasat Communications and Central Industrial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binasat and Central is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Central Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industrial Corp 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 Central Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industrial Corp has no effect on the direction of Binasat Communications i.e., Binasat Communications and Central Industrial go up and down completely randomly.
Pair Corralation between Binasat Communications and Central Industrial
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Central Industrial. In addition to that, Binasat Communications is 1.25 times more volatile than Central Industrial Corp. It trades about -0.01 of its total potential returns per unit of risk. Central Industrial Corp is currently generating about 0.11 per unit of volatility. If you would invest 35.00 in Central Industrial Corp on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Central Industrial Corp or generate 142.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Central Industrial Corp
Performance |
| Timeline |
| Binasat Communications |
| Central Industrial Corp |
Binasat Communications and Central Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Central Industrial
The main advantage of trading using opposite Binasat Communications and Central Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Central 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 Central Industrial will offset losses from the drop in Central 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 |
| Central Industrial vs. Sunway Construction Group | Central Industrial vs. JAKS Resources Bhd | Central Industrial vs. PESTECH International Bhd | Central Industrial vs. Tadmax Resources 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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