Correlation Between Radiant Globaltech and Senheng New
Can any of the company-specific risk be diversified away by investing in both Radiant Globaltech and Senheng New 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 Radiant Globaltech and Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Globaltech Bhd and Senheng New Retail, you can compare the effects of market volatilities on Radiant Globaltech and Senheng New 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 Radiant Globaltech with a short position of Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Globaltech and Senheng New.
Diversification Opportunities for Radiant Globaltech and Senheng New
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Radiant and Senheng is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Globaltech Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail and Radiant Globaltech 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 Radiant Globaltech Bhd are associated (or correlated) with Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Radiant Globaltech i.e., Radiant Globaltech and Senheng New go up and down completely randomly.
Pair Corralation between Radiant Globaltech and Senheng New
Assuming the 90 days trading horizon Radiant Globaltech is expected to generate 9.85 times less return on investment than Senheng New. In addition to that, Radiant Globaltech is 1.33 times more volatile than Senheng New Retail. It trades about 0.01 of its total potential returns per unit of risk. Senheng New Retail is currently generating about 0.13 per unit of volatility. If you would invest 24.00 in Senheng New Retail on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Senheng New Retail or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radiant Globaltech Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Radiant Globaltech Bhd |
| Senheng New Retail |
Radiant Globaltech and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Globaltech and Senheng New
The main advantage of trading using opposite Radiant Globaltech and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Globaltech position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Radiant Globaltech vs. Digistar Bhd | Radiant Globaltech vs. Minetech Resources Bhd | Radiant Globaltech vs. Swift Haulage Bhd | Radiant Globaltech vs. Bina Darulaman Bhd |
| Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Bina Darulaman 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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