Correlation Between Fraser Neave and Media Prima
Can any of the company-specific risk be diversified away by investing in both Fraser Neave and Media Prima 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 Fraser Neave and Media Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fraser Neave Holdings and Media Prima Bhd, you can compare the effects of market volatilities on Fraser Neave and Media Prima 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 Fraser Neave with a short position of Media Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fraser Neave and Media Prima.
Diversification Opportunities for Fraser Neave and Media Prima
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fraser and Media is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fraser Neave Holdings and Media Prima Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Prima Bhd and Fraser Neave 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 Fraser Neave Holdings are associated (or correlated) with Media Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Prima Bhd has no effect on the direction of Fraser Neave i.e., Fraser Neave and Media Prima go up and down completely randomly.
Pair Corralation between Fraser Neave and Media Prima
Assuming the 90 days trading horizon Fraser Neave is expected to generate 1.06 times less return on investment than Media Prima. But when comparing it to its historical volatility, Fraser Neave Holdings is 2.2 times less risky than Media Prima. It trades about 0.05 of its potential returns per unit of risk. Media Prima Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Media Prima Bhd on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Media Prima Bhd or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Fraser Neave Holdings vs. Media Prima Bhd
Performance |
| Timeline |
| Fraser Neave Holdings |
| Media Prima Bhd |
Fraser Neave and Media Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fraser Neave and Media Prima
The main advantage of trading using opposite Fraser Neave and Media Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fraser Neave position performs unexpectedly, Media Prima 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 Media Prima will offset losses from the drop in Media Prima's long position.| Fraser Neave vs. Press Metal Bhd | Fraser Neave vs. Media Prima Bhd | Fraser Neave vs. KPJ Healthcare Bhd | Fraser Neave vs. Al Aqar Healthcare |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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