Correlation Between Malayan Banking and Dataprep Holdings
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Dataprep Holdings 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 Dataprep Holdings 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 Dataprep Holdings Bhd, you can compare the effects of market volatilities on Malayan Banking and Dataprep Holdings 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 Dataprep Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Dataprep Holdings.
Diversification Opportunities for Malayan Banking and Dataprep Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Malayan and Dataprep is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Dataprep Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataprep Holdings 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 Dataprep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataprep Holdings Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Dataprep Holdings go up and down completely randomly.
Pair Corralation between Malayan Banking and Dataprep Holdings
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.24 times more return on investment than Dataprep Holdings. However, Malayan Banking Bhd is 4.15 times less risky than Dataprep Holdings. It trades about 0.14 of its potential returns per unit of risk. Dataprep Holdings Bhd is currently generating about 0.01 per unit of risk. If you would invest 1,024 in Malayan Banking Bhd on October 29, 2024 and sell it today you would earn a total of 16.00 from holding Malayan Banking Bhd or generate 1.56% 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. Dataprep Holdings Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Dataprep Holdings Bhd |
Malayan Banking and Dataprep Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Dataprep Holdings
The main advantage of trading using opposite Malayan Banking and Dataprep Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Dataprep Holdings 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 Dataprep Holdings will offset losses from the drop in Dataprep Holdings' long position.| Malayan Banking vs. Steel Hawk Berhad | Malayan Banking vs. YX Precious Metals | Malayan Banking vs. DC HEALTHCARE HOLDINGS | Malayan Banking vs. Al Aqar Healthcare |
| Dataprep Holdings vs. Datasonic Group Bhd | Dataprep Holdings vs. Awanbiru Technology Bhd | Dataprep Holdings vs. Systech Bhd | Dataprep Holdings vs. TechnoDex 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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