Correlation Between Amalgamated Industrial and ViTrox Bhd
Can any of the company-specific risk be diversified away by investing in both Amalgamated Industrial and ViTrox Bhd 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 Amalgamated Industrial and ViTrox Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amalgamated Industrial Steel and ViTrox Bhd, you can compare the effects of market volatilities on Amalgamated Industrial and ViTrox Bhd 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 Amalgamated Industrial with a short position of ViTrox Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amalgamated Industrial and ViTrox Bhd.
Diversification Opportunities for Amalgamated Industrial and ViTrox Bhd
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amalgamated and ViTrox is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amalgamated Industrial Steel and ViTrox Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViTrox Bhd and Amalgamated Industrial 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 Amalgamated Industrial Steel are associated (or correlated) with ViTrox Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViTrox Bhd has no effect on the direction of Amalgamated Industrial i.e., Amalgamated Industrial and ViTrox Bhd go up and down completely randomly.
Pair Corralation between Amalgamated Industrial and ViTrox Bhd
Assuming the 90 days trading horizon Amalgamated Industrial Steel is expected to generate 3.67 times more return on investment than ViTrox Bhd. However, Amalgamated Industrial is 3.67 times more volatile than ViTrox Bhd. It trades about 0.13 of its potential returns per unit of risk. ViTrox Bhd is currently generating about 0.13 per unit of risk. If you would invest 11.00 in Amalgamated Industrial Steel on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Amalgamated Industrial Steel or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amalgamated Industrial Steel vs. ViTrox Bhd
Performance |
| Timeline |
| Amalgamated Industrial |
| ViTrox Bhd |
Amalgamated Industrial and ViTrox Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amalgamated Industrial and ViTrox Bhd
The main advantage of trading using opposite Amalgamated Industrial and ViTrox Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amalgamated Industrial position performs unexpectedly, ViTrox Bhd 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 ViTrox Bhd will offset losses from the drop in ViTrox Bhd's long position.| Amalgamated Industrial vs. Digistar Bhd | Amalgamated Industrial vs. Minetech Resources Bhd | Amalgamated Industrial vs. OpenSys M Bhd | Amalgamated Industrial vs. Insas 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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