Correlation Between Greatech Technology and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Malayan Banking 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 Greatech Technology and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Malayan Banking Bhd, you can compare the effects of market volatilities on Greatech Technology and Malayan Banking 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 Greatech Technology with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Malayan Banking.
Diversification Opportunities for Greatech Technology and Malayan Banking
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatech and Malayan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd and Greatech Technology 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 Greatech Technology Bhd are associated (or correlated) with Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Malayan Banking go up and down completely randomly.
Pair Corralation between Greatech Technology and Malayan Banking
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the Malayan Banking. In addition to that, Greatech Technology is 2.03 times more volatile than Malayan Banking Bhd. It trades about -0.15 of its total potential returns per unit of risk. Malayan Banking Bhd is currently generating about 0.06 per unit of volatility. If you would invest 1,006 in Malayan Banking Bhd on October 20, 2024 and sell it today you would earn a total of 8.00 from holding Malayan Banking Bhd or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Malayan Banking Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| Malayan Banking Bhd |
Greatech Technology and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Malayan Banking
The main advantage of trading using opposite Greatech Technology and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| Greatech Technology vs. Magni Tech Industries | Greatech Technology vs. Sungei Bagan Rubber | Greatech Technology vs. Apollo Food Holdings | Greatech Technology vs. Radiant Globaltech Bhd |
| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Eonmetall Group Bhd | Malayan Banking vs. Bank Islam Malaysia | Malayan Banking vs. Awanbiru Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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