Correlation Between MISC Bhd and Star Media
Can any of the company-specific risk be diversified away by investing in both MISC Bhd and Star Media 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 MISC Bhd and Star Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MISC Bhd and Star Media Group, you can compare the effects of market volatilities on MISC Bhd and Star Media 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 MISC Bhd with a short position of Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of MISC Bhd and Star Media.
Diversification Opportunities for MISC Bhd and Star Media
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MISC and Star is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding MISC Bhd and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media Group and MISC 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 MISC Bhd are associated (or correlated) with Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of MISC Bhd i.e., MISC Bhd and Star Media go up and down completely randomly.
Pair Corralation between MISC Bhd and Star Media
Assuming the 90 days trading horizon MISC Bhd is expected to under-perform the Star Media. But the stock apears to be less risky and, when comparing its historical volatility, MISC Bhd is 1.38 times less risky than Star Media. The stock trades about -0.01 of its potential returns per unit of risk. The Star Media Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Star Media Group on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Star Media Group or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MISC Bhd vs. Star Media Group
Performance |
| Timeline |
| MISC Bhd |
| Star Media Group |
MISC Bhd and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MISC Bhd and Star Media
The main advantage of trading using opposite MISC Bhd and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MISC Bhd position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media's long position.| MISC Bhd vs. Sports Toto Berhad | MISC Bhd vs. BP Plastics Holding | MISC Bhd vs. Media Prima Bhd | MISC Bhd vs. Southern Steel Bhd |
| Star Media vs. Datasonic Group Bhd | Star Media vs. Malayan Banking Bhd | Star Media vs. JF Technology BHD | Star Media vs. Awanbiru Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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