Correlation Between Sungei Bagan and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan 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 Sungei Bagan and Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Sungei Bagan 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 Sungei Bagan with a short position of Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and Axiata Group.
Diversification Opportunities for Sungei Bagan and Axiata Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungei and Axiata is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber 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 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 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 Sungei Bagan i.e., Sungei Bagan and Axiata Group go up and down completely randomly.
Pair Corralation between Sungei Bagan and Axiata Group
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to generate 1.53 times more return on investment than Axiata Group. However, Sungei Bagan is 1.53 times more volatile than Axiata Group Bhd. It trades about 0.08 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.0 per unit of risk. If you would invest 333.00 in Sungei Bagan Rubber on September 12, 2024 and sell it today you would earn a total of 217.00 from holding Sungei Bagan Rubber or generate 65.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.43% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. Axiata Group Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| Axiata Group Bhd |
Sungei Bagan and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and Axiata Group
The main advantage of trading using opposite Sungei Bagan and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan 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.| Sungei Bagan vs. Nestle Bhd | Sungei Bagan vs. British American Tobacco | Sungei Bagan vs. FARM FRESH BERHAD | Sungei Bagan vs. Kawan Food Bhd |
| Axiata Group vs. Duopharma Biotech Bhd | Axiata Group vs. K One Technology Bhd | Axiata Group vs. Kobay Tech Bhd | Axiata Group vs. Sungei Bagan Rubber |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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