Correlation Between Sungei Bagan and Diversified Gateway
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and Diversified Gateway 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 Sungei Bagan and Diversified Gateway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and Diversified Gateway Solutions, you can compare the effects of market volatilities on Sungei Bagan and Diversified Gateway 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 Sungei Bagan with a short position of Diversified Gateway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and Diversified Gateway.
Diversification Opportunities for Sungei Bagan and Diversified Gateway
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungei and Diversified is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and Diversified Gateway Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Gateway and Sungei Bagan 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 Sungei Bagan Rubber are associated (or correlated) with Diversified Gateway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Gateway has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and Diversified Gateway go up and down completely randomly.
Pair Corralation between Sungei Bagan and Diversified Gateway
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to generate 0.23 times more return on investment than Diversified Gateway. However, Sungei Bagan Rubber is 4.3 times less risky than Diversified Gateway. It trades about -0.31 of its potential returns per unit of risk. Diversified Gateway Solutions is currently generating about -0.08 per unit of risk. If you would invest 600.00 in Sungei Bagan Rubber on September 1, 2024 and sell it today you would lose (34.00) from holding Sungei Bagan Rubber or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. Diversified Gateway Solutions
Performance |
| Timeline |
| Sungei Bagan Rubber |
| Diversified Gateway |
Sungei Bagan and Diversified Gateway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and Diversified Gateway
The main advantage of trading using opposite Sungei Bagan and Diversified Gateway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, Diversified Gateway 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 Diversified Gateway will offset losses from the drop in Diversified Gateway's long position.| Sungei Bagan vs. Eonmetall Group Bhd | Sungei Bagan vs. Sapura Industrial Bhd | Sungei Bagan vs. Mycron Steel Bhd | Sungei Bagan vs. Daya Materials Bhd |
| Diversified Gateway vs. Datasonic Group Bhd | Diversified Gateway vs. Awanbiru Technology Bhd | Diversified Gateway vs. Privasia 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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