Correlation Between Melewar Industrial and Deleum Bhd
Can any of the company-specific risk be diversified away by investing in both Melewar Industrial and Deleum 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 Melewar Industrial and Deleum Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melewar Industrial Group and Deleum Bhd, you can compare the effects of market volatilities on Melewar Industrial and Deleum 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 Melewar Industrial with a short position of Deleum Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melewar Industrial and Deleum Bhd.
Diversification Opportunities for Melewar Industrial and Deleum Bhd
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Melewar and Deleum is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Melewar Industrial Group and Deleum Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deleum Bhd and Melewar 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 Melewar Industrial Group are associated (or correlated) with Deleum Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deleum Bhd has no effect on the direction of Melewar Industrial i.e., Melewar Industrial and Deleum Bhd go up and down completely randomly.
Pair Corralation between Melewar Industrial and Deleum Bhd
Assuming the 90 days trading horizon Melewar Industrial Group is expected to under-perform the Deleum Bhd. In addition to that, Melewar Industrial is 1.15 times more volatile than Deleum Bhd. It trades about -0.01 of its total potential returns per unit of risk. Deleum Bhd is currently generating about 0.07 per unit of volatility. If you would invest 86.00 in Deleum Bhd on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Deleum Bhd or generate 60.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Melewar Industrial Group vs. Deleum Bhd
Performance |
| Timeline |
| Melewar Industrial |
| Deleum Bhd |
Melewar Industrial and Deleum Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melewar Industrial and Deleum Bhd
The main advantage of trading using opposite Melewar Industrial and Deleum Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melewar Industrial position performs unexpectedly, Deleum 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 Deleum Bhd will offset losses from the drop in Deleum Bhd's long position.| Melewar Industrial vs. Awanbiru Technology Bhd | Melewar Industrial vs. PMB Technology Bhd | Melewar Industrial vs. Duopharma Biotech Bhd | Melewar Industrial vs. Cloudpoint Technology Berhad |
| Deleum Bhd vs. Sports Toto Berhad | Deleum Bhd vs. Eonmetall Group Bhd | Deleum Bhd vs. Melewar Industrial Group | Deleum Bhd vs. Leader Steel Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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