Correlation Between Sungei Bagan and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and Eonmetall 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 Eonmetall 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 Eonmetall Group Bhd, you can compare the effects of market volatilities on Sungei Bagan and Eonmetall 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 Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and Eonmetall Group.
Diversification Opportunities for Sungei Bagan and Eonmetall Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungei and Eonmetall is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall 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 Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and Eonmetall Group go up and down completely randomly.
Pair Corralation between Sungei Bagan and Eonmetall Group
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to generate 0.28 times more return on investment than Eonmetall Group. However, Sungei Bagan Rubber is 3.57 times less risky than Eonmetall Group. It trades about 0.01 of its potential returns per unit of risk. Eonmetall Group Bhd is currently generating about -0.05 per unit of risk. If you would invest 583.00 in Sungei Bagan Rubber on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Sungei Bagan Rubber or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. Eonmetall Group Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| Eonmetall Group Bhd |
Sungei Bagan and Eonmetall Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and Eonmetall Group
The main advantage of trading using opposite Sungei Bagan and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, Eonmetall 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 Eonmetall Group will offset losses from the drop in Eonmetall Group's long position.| Sungei Bagan vs. Kluang Rubber | Sungei Bagan vs. Senheng New Retail | Sungei Bagan vs. Daya Materials Bhd | Sungei Bagan vs. Eonmetall Group Bhd |
| Eonmetall Group vs. PIE Industrial Bhd | Eonmetall Group vs. ES Ceramics Technology | Eonmetall Group vs. Cengild Medical Berhad | Eonmetall Group vs. PMB 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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