Correlation Between Greatech Technology and Telekom Malaysia
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia Bhd, you can compare the effects of market volatilities on Greatech Technology and Telekom Malaysia 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 Telekom Malaysia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Telekom Malaysia.
Diversification Opportunities for Greatech Technology and Telekom Malaysia
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greatech and Telekom is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Telekom Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Malaysia 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 Telekom Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Malaysia Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Telekom Malaysia go up and down completely randomly.
Pair Corralation between Greatech Technology and Telekom Malaysia
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the Telekom Malaysia. In addition to that, Greatech Technology is 1.62 times more volatile than Telekom Malaysia Bhd. It trades about -0.33 of its total potential returns per unit of risk. Telekom Malaysia Bhd is currently generating about -0.18 per unit of volatility. If you would invest 677.00 in Telekom Malaysia Bhd on November 2, 2024 and sell it today you would lose (27.00) from holding Telekom Malaysia Bhd or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Telekom Malaysia Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| Telekom Malaysia Bhd |
Greatech Technology and Telekom Malaysia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Telekom Malaysia
The main advantage of trading using opposite Greatech Technology and Telekom Malaysia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Telekom Malaysia 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 Telekom Malaysia will offset losses from the drop in Telekom Malaysia's long position.| Greatech Technology vs. Lotte Chemical Titan | Greatech Technology vs. Malayan Banking Bhd | Greatech Technology vs. Bank Islam Malaysia | Greatech Technology vs. Dufu Tech Corp |
| Telekom Malaysia vs. Axiata Group Bhd | Telekom Malaysia vs. TIME Dotcom Bhd | Telekom Malaysia vs. Binasat Communications Bhd | Telekom Malaysia vs. Techfast Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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