Correlation Between Sungei Bagan and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and PIE Industrial 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 PIE Industrial 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 PIE Industrial Bhd, you can compare the effects of market volatilities on Sungei Bagan and PIE Industrial 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and PIE Industrial.
Diversification Opportunities for Sungei Bagan and PIE Industrial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sungei and PIE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and PIE Industrial go up and down completely randomly.
Pair Corralation between Sungei Bagan and PIE Industrial
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to generate 0.45 times more return on investment than PIE Industrial. However, Sungei Bagan Rubber is 2.21 times less risky than PIE Industrial. It trades about -0.03 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about -0.07 per unit of risk. If you would invest 591.00 in Sungei Bagan Rubber on November 2, 2024 and sell it today you would lose (17.00) from holding Sungei Bagan Rubber or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. PIE Industrial Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| PIE Industrial Bhd |
Sungei Bagan and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and PIE Industrial
The main advantage of trading using opposite Sungei Bagan and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, PIE Industrial 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| Sungei Bagan vs. Rubberex M | Sungei Bagan vs. Public Packages Holdings | Sungei Bagan vs. Central Industrial Corp | Sungei Bagan vs. Berjaya Food Bhd |
| PIE Industrial vs. Senheng New Retail | PIE Industrial vs. ES Ceramics Technology | PIE Industrial vs. Choo Bee Metal | PIE Industrial vs. Central Industrial Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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