Correlation Between Alliance Financial and MISC Bhd
Can any of the company-specific risk be diversified away by investing in both Alliance Financial and MISC Bhd 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 Alliance Financial and MISC Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Financial Group and MISC Bhd, you can compare the effects of market volatilities on Alliance Financial and MISC Bhd 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 Alliance Financial with a short position of MISC Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Financial and MISC Bhd.
Diversification Opportunities for Alliance Financial and MISC Bhd
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and MISC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Financial Group and MISC Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISC Bhd and Alliance Financial 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 Alliance Financial Group are associated (or correlated) with MISC Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISC Bhd has no effect on the direction of Alliance Financial i.e., Alliance Financial and MISC Bhd go up and down completely randomly.
Pair Corralation between Alliance Financial and MISC Bhd
Assuming the 90 days trading horizon Alliance Financial Group is expected to generate 1.64 times more return on investment than MISC Bhd. However, Alliance Financial is 1.64 times more volatile than MISC Bhd. It trades about 0.18 of its potential returns per unit of risk. MISC Bhd is currently generating about -0.06 per unit of risk. If you would invest 460.00 in Alliance Financial Group on August 24, 2024 and sell it today you would earn a total of 37.00 from holding Alliance Financial Group or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Financial Group vs. MISC Bhd
Performance |
| Timeline |
| Alliance Financial |
| MISC Bhd |
Alliance Financial and MISC Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Financial and MISC Bhd
The main advantage of trading using opposite Alliance Financial and MISC Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Financial position performs unexpectedly, MISC Bhd 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 MISC Bhd will offset losses from the drop in MISC Bhd's long position.| Alliance Financial vs. Aeon Credit Service | Alliance Financial vs. Minetech Resources Bhd | Alliance Financial vs. Swift Haulage Bhd | Alliance Financial vs. Sunzen Biotech Bhd |
| MISC Bhd vs. Digistar Bhd | MISC Bhd vs. Minetech Resources Bhd | MISC Bhd vs. Swift Haulage Bhd | MISC Bhd vs. Kumpulan Kitacon Berhad |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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