Correlation Between Malayan Banking and Swift Haulage
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Swift Haulage 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 Swift Haulage 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 Swift Haulage Bhd, you can compare the effects of market volatilities on Malayan Banking and Swift Haulage 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 Swift Haulage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Swift Haulage.
Diversification Opportunities for Malayan Banking and Swift Haulage
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Malayan and Swift is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Swift Haulage Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Haulage 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 Swift Haulage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Haulage Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Swift Haulage go up and down completely randomly.
Pair Corralation between Malayan Banking and Swift Haulage
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.38 times more return on investment than Swift Haulage. However, Malayan Banking Bhd is 2.61 times less risky than Swift Haulage. It trades about -0.14 of its potential returns per unit of risk. Swift Haulage Bhd is currently generating about -0.13 per unit of risk. If you would invest 1,046 in Malayan Banking Bhd on August 30, 2024 and sell it today you would lose (26.00) from holding Malayan Banking Bhd or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Swift Haulage Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Swift Haulage Bhd |
Malayan Banking and Swift Haulage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Swift Haulage
The main advantage of trading using opposite Malayan Banking and Swift Haulage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Swift Haulage 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 Swift Haulage will offset losses from the drop in Swift Haulage's long position.| Malayan Banking vs. PIE Industrial Bhd | Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Binasat Communications Bhd | Malayan Banking vs. Choo Bee Metal |
| Swift Haulage vs. Tex Cycle Technology | Swift Haulage vs. Cloudpoint Technology Berhad | Swift Haulage vs. Lotte Chemical Titan | Swift Haulage vs. Apollo Food Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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