Correlation Between AMMB Holdings and Digistar Bhd
Can any of the company-specific risk be diversified away by investing in both AMMB Holdings and Digistar Bhd 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 AMMB Holdings and Digistar Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMMB Holdings Bhd and Digistar Bhd, you can compare the effects of market volatilities on AMMB Holdings and Digistar Bhd 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 AMMB Holdings with a short position of Digistar Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMMB Holdings and Digistar Bhd.
Diversification Opportunities for AMMB Holdings and Digistar Bhd
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMMB and Digistar is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AMMB Holdings Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and AMMB Holdings 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 AMMB Holdings Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of AMMB Holdings i.e., AMMB Holdings and Digistar Bhd go up and down completely randomly.
Pair Corralation between AMMB Holdings and Digistar Bhd
Assuming the 90 days trading horizon AMMB Holdings is expected to generate 21.04 times less return on investment than Digistar Bhd. But when comparing it to its historical volatility, AMMB Holdings Bhd is 4.63 times less risky than Digistar Bhd. It trades about 0.01 of its potential returns per unit of risk. Digistar Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Digistar Bhd on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Digistar Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMMB Holdings Bhd vs. Digistar Bhd
Performance |
| Timeline |
| AMMB Holdings Bhd |
| Digistar Bhd |
AMMB Holdings and Digistar Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMMB Holdings and Digistar Bhd
The main advantage of trading using opposite AMMB Holdings and Digistar Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMMB Holdings position performs unexpectedly, Digistar Bhd 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 Digistar Bhd will offset losses from the drop in Digistar Bhd's long position.| AMMB Holdings vs. Alliance Financial Group | AMMB Holdings vs. Minetech Resources Bhd | AMMB Holdings vs. Swift Haulage Bhd | AMMB Holdings vs. Sunzen Biotech Bhd |
| Digistar Bhd vs. TAS Offshore Bhd | Digistar Bhd vs. Rubberex M | Digistar Bhd vs. Sungei Bagan Rubber | Digistar Bhd vs. Ho Hup Construction |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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