Correlation Between Malayan Banking and Heineken Bhd
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Heineken 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 Malayan Banking and Heineken Bhd 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 Heineken Bhd, you can compare the effects of market volatilities on Malayan Banking and Heineken 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 Malayan Banking with a short position of Heineken Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Heineken Bhd.
Diversification Opportunities for Malayan Banking and Heineken Bhd
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malayan and Heineken is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Heineken Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Bhd 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 Heineken Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Heineken Bhd go up and down completely randomly.
Pair Corralation between Malayan Banking and Heineken Bhd
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to under-perform the Heineken Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Malayan Banking Bhd is 1.44 times less risky than Heineken Bhd. The stock trades about -0.05 of its potential returns per unit of risk. The Heineken Bhd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,290 in Heineken Bhd on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Heineken Bhd or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Heineken Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Heineken Bhd |
Malayan Banking and Heineken Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Heineken Bhd
The main advantage of trading using opposite Malayan Banking and Heineken Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Heineken 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 Heineken Bhd will offset losses from the drop in Heineken Bhd's long position.| Malayan Banking vs. Cengild Medical Berhad | Malayan Banking vs. YX Precious Metals | Malayan Banking vs. Melewar Industrial Group | Malayan Banking vs. Petronas Chemicals Group |
| Heineken Bhd vs. Digistar Bhd | Heineken Bhd vs. Minetech Resources Bhd | Heineken Bhd vs. OpenSys M Bhd | Heineken Bhd vs. Insas 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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