Correlation Between Batu Kawan and Techbond Group
Can any of the company-specific risk be diversified away by investing in both Batu Kawan and Techbond Group 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 Batu Kawan and Techbond Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batu Kawan Bhd and Techbond Group Bhd, you can compare the effects of market volatilities on Batu Kawan and Techbond Group 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 Batu Kawan with a short position of Techbond Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batu Kawan and Techbond Group.
Diversification Opportunities for Batu Kawan and Techbond Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batu and Techbond is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Batu Kawan Bhd and Techbond Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techbond Group Bhd and Batu Kawan 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 Batu Kawan Bhd are associated (or correlated) with Techbond Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techbond Group Bhd has no effect on the direction of Batu Kawan i.e., Batu Kawan and Techbond Group go up and down completely randomly.
Pair Corralation between Batu Kawan and Techbond Group
Assuming the 90 days trading horizon Batu Kawan Bhd is expected to generate 0.46 times more return on investment than Techbond Group. However, Batu Kawan Bhd is 2.18 times less risky than Techbond Group. It trades about 0.07 of its potential returns per unit of risk. Techbond Group Bhd is currently generating about -0.3 per unit of risk. If you would invest 1,980 in Batu Kawan Bhd on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Batu Kawan Bhd or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Batu Kawan Bhd vs. Techbond Group Bhd
Performance |
| Timeline |
| Batu Kawan Bhd |
| Techbond Group Bhd |
Batu Kawan and Techbond Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batu Kawan and Techbond Group
The main advantage of trading using opposite Batu Kawan and Techbond Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batu Kawan position performs unexpectedly, Techbond Group 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 Techbond Group will offset losses from the drop in Techbond Group's long position.| Batu Kawan vs. Southern Steel Bhd | Batu Kawan vs. Mercury Industries Bhd | Batu Kawan vs. CSC Steel Holdings | Batu Kawan vs. Melewar Industrial Group |
| Techbond Group vs. Kossan Rubber Industries | Techbond Group vs. Sports Toto Berhad | Techbond Group vs. YTL Hospitality REIT | Techbond Group vs. Apollo Food Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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