Correlation Between Malayan Banking and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Resintech 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 Resintech 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 Resintech Bhd, you can compare the effects of market volatilities on Malayan Banking and Resintech 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Resintech Bhd.
Diversification Opportunities for Malayan Banking and Resintech Bhd
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Malayan and Resintech is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Resintech Bhd go up and down completely randomly.
Pair Corralation between Malayan Banking and Resintech Bhd
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.47 times more return on investment than Resintech Bhd. However, Malayan Banking Bhd is 2.14 times less risky than Resintech Bhd. It trades about -0.11 of its potential returns per unit of risk. Resintech Bhd is currently generating about -0.16 per unit of risk. If you would invest 1,040 in Malayan Banking Bhd on September 2, 2024 and sell it today you would lose (20.00) from holding Malayan Banking Bhd or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. Resintech Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Resintech Bhd |
Malayan Banking and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Resintech Bhd
The main advantage of trading using opposite Malayan Banking and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Resintech 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. RHB Bank Bhd |
| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd 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 CEOs Directory module to screen CEOs from public companies around the world.
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