Correlation Between Insas Bhd and Senheng New
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Senheng New 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 Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Senheng New Retail, you can compare the effects of market volatilities on Insas Bhd and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Senheng New.
Diversification Opportunities for Insas Bhd and Senheng New
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Insas and Senheng is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Insas Bhd i.e., Insas Bhd and Senheng New go up and down completely randomly.
Pair Corralation between Insas Bhd and Senheng New
Assuming the 90 days trading horizon Insas Bhd is expected to under-perform the Senheng New. But the stock apears to be less risky and, when comparing its historical volatility, Insas Bhd is 1.04 times less risky than Senheng New. The stock trades about -0.09 of its potential returns per unit of risk. The Senheng New Retail is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Senheng New Retail on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Senheng New Retail or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insas Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Insas Bhd |
| Senheng New Retail |
Insas Bhd and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Senheng New
The main advantage of trading using opposite Insas Bhd and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Insas Bhd vs. Apex Healthcare Bhd | Insas Bhd vs. Press Metal Bhd | Insas Bhd vs. Lotte Chemical Titan | Insas Bhd vs. Aeon Credit Service |
| Senheng New vs. Mr D I | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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