Correlation Between Sports Toto and Top Glove
Can any of the company-specific risk be diversified away by investing in both Sports Toto and Top Glove 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 Sports Toto and Top Glove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Toto Berhad and Top Glove, you can compare the effects of market volatilities on Sports Toto and Top Glove 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 Sports Toto with a short position of Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Toto and Top Glove.
Diversification Opportunities for Sports Toto and Top Glove
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sports and Top is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sports Toto Berhad and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove and Sports Toto 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 Sports Toto Berhad are associated (or correlated) with Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of Sports Toto i.e., Sports Toto and Top Glove go up and down completely randomly.
Pair Corralation between Sports Toto and Top Glove
Assuming the 90 days trading horizon Sports Toto Berhad is expected to under-perform the Top Glove. But the stock apears to be less risky and, when comparing its historical volatility, Sports Toto Berhad is 1.44 times less risky than Top Glove. The stock trades about -0.2 of its potential returns per unit of risk. The Top Glove is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Top Glove on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Top Glove or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Toto Berhad vs. Top Glove
Performance |
| Timeline |
| Sports Toto Berhad |
| Top Glove |
Sports Toto and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Toto and Top Glove
The main advantage of trading using opposite Sports Toto and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Toto position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| Sports Toto vs. Carlsberg Brewery Malaysia | Sports Toto vs. Alliance Financial Group | Sports Toto vs. Press Metal Bhd | Sports Toto vs. Impiana Hotels Bhd |
| Top Glove vs. Sports Toto Berhad | Top Glove vs. ONETECH SOLUTIONS HOLDINGS | Top Glove vs. ES Ceramics Technology | Top Glove vs. JF Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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