Correlation Between Sungei Bagan and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and TAS Offshore 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 TAS Offshore 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 TAS Offshore Bhd, you can compare the effects of market volatilities on Sungei Bagan and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and TAS Offshore.
Diversification Opportunities for Sungei Bagan and TAS Offshore
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungei and TAS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and TAS Offshore go up and down completely randomly.
Pair Corralation between Sungei Bagan and TAS Offshore
Assuming the 90 days trading horizon Sungei Bagan is expected to generate 1.93 times less return on investment than TAS Offshore. But when comparing it to its historical volatility, Sungei Bagan Rubber is 1.91 times less risky than TAS Offshore. It trades about 0.07 of its potential returns per unit of risk. TAS Offshore Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in TAS Offshore Bhd on November 5, 2024 and sell it today you would earn a total of 43.00 from holding TAS Offshore Bhd or generate 172.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.59% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. TAS Offshore Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| TAS Offshore Bhd |
Sungei Bagan and TAS Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and TAS Offshore
The main advantage of trading using opposite Sungei Bagan and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.| Sungei Bagan vs. K One Technology Bhd | Sungei Bagan vs. SFP Tech Holdings | Sungei Bagan vs. EA Technique M | Sungei Bagan vs. CPE Technology Berhad |
| TAS Offshore vs. Media Prima Bhd | TAS Offshore vs. CPE Technology Berhad | TAS Offshore vs. Systech Bhd | TAS Offshore vs. Radiant Globaltech 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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