Correlation Between Malayan Banking and Sunway Bhd
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Sunway 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 Sunway 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 Sunway Bhd, you can compare the effects of market volatilities on Malayan Banking and Sunway 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 Sunway Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Sunway Bhd.
Diversification Opportunities for Malayan Banking and Sunway Bhd
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Malayan and Sunway is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Sunway Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway 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 Sunway Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Sunway Bhd go up and down completely randomly.
Pair Corralation between Malayan Banking and Sunway Bhd
Assuming the 90 days trading horizon Malayan Banking is expected to generate 8.33 times less return on investment than Sunway Bhd. But when comparing it to its historical volatility, Malayan Banking Bhd is 2.04 times less risky than Sunway Bhd. It trades about 0.08 of its potential returns per unit of risk. Sunway Bhd is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Sunway Bhd on November 28, 2024 and sell it today you would earn a total of 38.00 from holding Sunway Bhd or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Sunway Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Sunway Bhd |
Malayan Banking and Sunway Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Sunway Bhd
The main advantage of trading using opposite Malayan Banking and Sunway Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Sunway 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 Sunway Bhd will offset losses from the drop in Sunway Bhd's long position.| Malayan Banking vs. Lotte Chemical Titan | Malayan Banking vs. SSF Home Group | Malayan Banking vs. Cloudpoint Technology Berhad | Malayan Banking vs. Public Bank Bhd |
| Sunway Bhd vs. Rubberex M | Sunway Bhd vs. Sungei Bagan Rubber | Sunway Bhd vs. Mycron Steel Bhd | Sunway Bhd vs. Aeon Credit Service |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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