Correlation Between Malayan Banking and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Malayan Banking and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Asian Pac.
Diversification Opportunities for Malayan Banking and Asian Pac
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Malayan and Asian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Malayan Banking i.e., Malayan Banking and Asian Pac go up and down completely randomly.
Pair Corralation between Malayan Banking and Asian Pac
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.16 times more return on investment than Asian Pac. However, Malayan Banking Bhd is 6.44 times less risky than Asian Pac. It trades about 0.1 of its potential returns per unit of risk. Asian Pac Holdings is currently generating about 0.01 per unit of risk. If you would invest 859.00 in Malayan Banking Bhd on September 14, 2024 and sell it today you would earn a total of 155.00 from holding Malayan Banking Bhd or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Asian Pac Holdings
Performance |
| Timeline |
| Malayan Banking Bhd |
| Asian Pac Holdings |
Malayan Banking and Asian Pac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Asian Pac
The main advantage of trading using opposite Malayan Banking and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.| Malayan Banking vs. Carlsberg Brewery Malaysia | Malayan Banking vs. Impiana Hotels Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. Sports Toto Berhad |
| Asian Pac vs. Kawan Food Bhd | Asian Pac vs. Oriental Food Industries | Asian Pac vs. Computer Forms Bhd | Asian Pac vs. Malayan Banking 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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