Correlation Between Batu Kawan and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Batu Kawan and Axiata 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 Axiata 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 Axiata Group Bhd, you can compare the effects of market volatilities on Batu Kawan and Axiata 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batu Kawan and Axiata Group.
Diversification Opportunities for Batu Kawan and Axiata Group
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Batu and Axiata is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Batu Kawan Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Batu Kawan i.e., Batu Kawan and Axiata Group go up and down completely randomly.
Pair Corralation between Batu Kawan and Axiata Group
Assuming the 90 days trading horizon Batu Kawan is expected to generate 5.51 times less return on investment than Axiata Group. But when comparing it to its historical volatility, Batu Kawan Bhd is 2.32 times less risky than Axiata Group. It trades about 0.05 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Axiata Group Bhd on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Axiata Group Bhd or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Batu Kawan Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| Batu Kawan Bhd |
| Axiata Group Bhd |
Batu Kawan and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batu Kawan and Axiata Group
The main advantage of trading using opposite Batu Kawan and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batu Kawan position performs unexpectedly, Axiata 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| Batu Kawan vs. Southern Steel Bhd | Batu Kawan vs. MClean Technologies Bhd | Batu Kawan vs. Press Metal Bhd | Batu Kawan vs. Public Packages Holdings |
| Axiata Group vs. PMB Technology Bhd | Axiata Group vs. Duopharma Biotech Bhd | Axiata Group vs. Sports Toto Berhad | Axiata Group vs. Aurelius Technologies 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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