Correlation Between Insas Bhd and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Alliance Financial 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 Insas Bhd and Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Alliance Financial Group, you can compare the effects of market volatilities on Insas Bhd and Alliance Financial 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 Insas Bhd with a short position of Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Alliance Financial.
Diversification Opportunities for Insas Bhd and Alliance Financial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insas and Alliance is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial and Insas Bhd 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 Insas Bhd are associated (or correlated) with Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Insas Bhd i.e., Insas Bhd and Alliance Financial go up and down completely randomly.
Pair Corralation between Insas Bhd and Alliance Financial
Assuming the 90 days trading horizon Insas Bhd is expected to generate 3.23 times less return on investment than Alliance Financial. In addition to that, Insas Bhd is 1.92 times more volatile than Alliance Financial Group. It trades about 0.03 of its total potential returns per unit of risk. Alliance Financial Group is currently generating about 0.16 per unit of volatility. If you would invest 323.00 in Alliance Financial Group on August 26, 2024 and sell it today you would earn a total of 176.00 from holding Alliance Financial Group or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insas Bhd vs. Alliance Financial Group
Performance |
| Timeline |
| Insas Bhd |
| Alliance Financial |
Insas Bhd and Alliance Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Alliance Financial
The main advantage of trading using opposite Insas Bhd and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.| Insas Bhd vs. Malayan Banking Bhd | Insas Bhd vs. Public Bank Bhd | Insas Bhd vs. Petronas Chemicals Group | Insas Bhd vs. Tenaga Nasional Bhd |
| Alliance Financial vs. Digistar Bhd | Alliance Financial vs. Minetech Resources Bhd | Alliance Financial vs. OpenSys M Bhd | Alliance Financial 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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