Correlation Between Malayan Banking and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech Bhd, you can compare the effects of market volatilities on Malayan Banking and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Duopharma Biotech.
Diversification Opportunities for Malayan Banking and Duopharma Biotech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Malayan and Duopharma is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Duopharma Biotech go up and down completely randomly.
Pair Corralation between Malayan Banking and Duopharma Biotech
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.5 times more return on investment than Duopharma Biotech. However, Malayan Banking Bhd is 1.99 times less risky than Duopharma Biotech. It trades about 0.05 of its potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about 0.02 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Duopharma Biotech Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Duopharma Biotech Bhd |
Malayan Banking and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Duopharma Biotech
The main advantage of trading using opposite Malayan Banking and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech's long position.| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. RHB Bank Bhd |
| Duopharma Biotech vs. Digistar Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Swift Haulage Bhd | Duopharma Biotech vs. Bina Darulaman 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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