Correlation Between Malayan Banking and Senheng New
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Malayan Banking and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Senheng New.
Diversification Opportunities for Malayan Banking and Senheng New
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Malayan and Senheng is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Malayan Banking i.e., Malayan Banking and Senheng New go up and down completely randomly.
Pair Corralation between Malayan Banking and Senheng New
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.27 times more return on investment than Senheng New. However, Malayan Banking Bhd is 3.65 times less risky than Senheng New. It trades about 0.1 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.03 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 | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Malayan Banking Bhd |
| Senheng New Retail |
Malayan Banking and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Senheng New
The main advantage of trading using opposite Malayan Banking and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New'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 |
| Senheng New vs. Malayan Banking Bhd | Senheng New vs. Lotte Chemical Titan | Senheng New vs. SSF Home Group | Senheng New vs. Sports Toto 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |