Correlation Between Malayan Banking and Aurelius Technologies
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Aurelius Technologies 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 Aurelius Technologies 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 Aurelius Technologies Bhd, you can compare the effects of market volatilities on Malayan Banking and Aurelius Technologies 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 Aurelius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Aurelius Technologies.
Diversification Opportunities for Malayan Banking and Aurelius Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Malayan and Aurelius is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Aurelius Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius Technologies 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 Aurelius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Technologies Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Aurelius Technologies go up and down completely randomly.
Pair Corralation between Malayan Banking and Aurelius Technologies
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.38 times more return on investment than Aurelius Technologies. However, Malayan Banking Bhd is 2.66 times less risky than Aurelius Technologies. It trades about 0.05 of its potential returns per unit of risk. Aurelius Technologies Bhd is currently generating about -0.05 per unit of risk. If you would invest 979.00 in Malayan Banking Bhd on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Malayan Banking Bhd or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Aurelius Technologies Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Aurelius Technologies Bhd |
Malayan Banking and Aurelius Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Aurelius Technologies
The main advantage of trading using opposite Malayan Banking and Aurelius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Aurelius Technologies 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 Aurelius Technologies will offset losses from the drop in Aurelius Technologies' long position.| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. RHB Bank Bhd |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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