Correlation Between Malayan Banking and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and AirAsia X 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 AirAsia X 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 AirAsia X Bhd, you can compare the effects of market volatilities on Malayan Banking and AirAsia X 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 AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and AirAsia X.
Diversification Opportunities for Malayan Banking and AirAsia X
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Malayan and AirAsia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X 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 AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and AirAsia X go up and down completely randomly.
Pair Corralation between Malayan Banking and AirAsia X
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.26 times more return on investment than AirAsia X. However, Malayan Banking Bhd is 3.81 times less risky than AirAsia X. It trades about 0.05 of its potential returns per unit of risk. AirAsia X Bhd is currently generating about -0.27 per unit of risk. If you would invest 1,018 in Malayan Banking Bhd on November 2, 2024 and sell it today you would earn a total of 6.00 from holding Malayan Banking Bhd or generate 0.59% 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. AirAsia X Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| AirAsia X Bhd |
Malayan Banking and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and AirAsia X
The main advantage of trading using opposite Malayan Banking and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, AirAsia X 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 AirAsia X will offset losses from the drop in AirAsia X's long position.| Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Computer Forms Bhd | Malayan Banking vs. Melewar Industrial Group | Malayan Banking vs. Kluang Rubber |
| AirAsia X vs. IHH Healthcare Bhd | AirAsia X vs. Lysaght Galvanized Steel | AirAsia X vs. Diversified Gateway Solutions | AirAsia X vs. Cengild Medical Berhad |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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