Correlation Between Malayan Banking and Nova Wellness
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Nova Wellness 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 Malayan Banking and Nova Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malayan Banking Bhd and Nova Wellness Group, you can compare the effects of market volatilities on Malayan Banking and Nova Wellness 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 Malayan Banking with a short position of Nova Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Nova Wellness.
Diversification Opportunities for Malayan Banking and Nova Wellness
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Malayan and Nova is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Nova Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Wellness Group and Malayan Banking 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 Malayan Banking Bhd are associated (or correlated) with Nova Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Wellness Group has no effect on the direction of Malayan Banking i.e., Malayan Banking and Nova Wellness go up and down completely randomly.
Pair Corralation between Malayan Banking and Nova Wellness
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.27 times more return on investment than Nova Wellness. However, Malayan Banking Bhd is 3.73 times less risky than Nova Wellness. It trades about 0.11 of its potential returns per unit of risk. Nova Wellness Group is currently generating about -0.06 per unit of risk. If you would invest 761.00 in Malayan Banking Bhd on October 30, 2024 and sell it today you would earn a total of 275.00 from holding Malayan Banking Bhd or generate 36.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.13% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Nova Wellness Group
Performance |
| Timeline |
| Malayan Banking Bhd |
| Nova Wellness Group |
Malayan Banking and Nova Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Nova Wellness
The main advantage of trading using opposite Malayan Banking and Nova Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Nova Wellness 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 Nova Wellness will offset losses from the drop in Nova Wellness' long position.| Malayan Banking vs. IHH Healthcare Bhd | Malayan Banking vs. Nova Wellness Group | Malayan Banking vs. Impiana Hotels Bhd | Malayan Banking vs. Apex Healthcare Bhd |
| Nova Wellness vs. PMB Technology Bhd | Nova Wellness vs. Kluang Rubber | Nova Wellness vs. K One Technology Bhd | Nova Wellness vs. Radiant Globaltech 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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