Correlation Between Malayan Banking and Crescendo Bhd
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Crescendo 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 Crescendo 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 Crescendo Bhd, you can compare the effects of market volatilities on Malayan Banking and Crescendo 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 Crescendo Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Crescendo Bhd.
Diversification Opportunities for Malayan Banking and Crescendo Bhd
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Malayan and Crescendo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Crescendo Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescendo 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 Crescendo Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescendo Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Crescendo Bhd go up and down completely randomly.
Pair Corralation between Malayan Banking and Crescendo Bhd
Assuming the 90 days trading horizon Malayan Banking is expected to generate 6.02 times less return on investment than Crescendo Bhd. But when comparing it to its historical volatility, Malayan Banking Bhd is 4.87 times less risky than Crescendo Bhd. It trades about 0.1 of its potential returns per unit of risk. Crescendo Bhd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Crescendo Bhd on September 14, 2024 and sell it today you would earn a total of 110.00 from holding Crescendo Bhd or generate 314.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.65% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Crescendo Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Crescendo Bhd |
Malayan Banking and Crescendo Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Crescendo Bhd
The main advantage of trading using opposite Malayan Banking and Crescendo Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Crescendo 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 Crescendo Bhd will offset losses from the drop in Crescendo Bhd'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 |
| Crescendo Bhd vs. Malayan Banking Bhd | Crescendo Bhd vs. Public Bank Bhd | Crescendo Bhd vs. Petronas Chemicals Group | Crescendo Bhd vs. Tenaga Nasional Bhd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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