Correlation Between Batu Kawan and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Batu Kawan and Magni Tech 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 Magni Tech 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 Magni Tech Industries, you can compare the effects of market volatilities on Batu Kawan and Magni Tech 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 Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batu Kawan and Magni Tech.
Diversification Opportunities for Batu Kawan and Magni Tech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Batu and Magni is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Batu Kawan Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries 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 Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Batu Kawan i.e., Batu Kawan and Magni Tech go up and down completely randomly.
Pair Corralation between Batu Kawan and Magni Tech
Assuming the 90 days trading horizon Batu Kawan Bhd is expected to under-perform the Magni Tech. But the stock apears to be less risky and, when comparing its historical volatility, Batu Kawan Bhd is 3.61 times less risky than Magni Tech. The stock trades about -0.06 of its potential returns per unit of risk. The Magni Tech Industries is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 251.00 in Magni Tech Industries on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Magni Tech Industries or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batu Kawan Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Batu Kawan Bhd |
| Magni Tech Industries |
Batu Kawan and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batu Kawan and Magni Tech
The main advantage of trading using opposite Batu Kawan and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batu Kawan position performs unexpectedly, Magni Tech 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Batu Kawan vs. Dataprep Holdings Bhd | Batu Kawan vs. DC HEALTHCARE HOLDINGS | Batu Kawan vs. Ho Hup Construction | Batu Kawan vs. Choo Bee Metal |
| Magni Tech vs. ES Ceramics Technology | Magni Tech vs. Al Aqar Healthcare | Magni Tech vs. PMB Technology Bhd | Magni Tech vs. Digistar 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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