Correlation Between Media Prima and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Media Prima and Cengild Medical 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 Media Prima and Cengild Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Prima Bhd and Cengild Medical Berhad, you can compare the effects of market volatilities on Media Prima and Cengild Medical 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 Media Prima with a short position of Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and Cengild Medical.
Diversification Opportunities for Media Prima and Cengild Medical
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Media and Cengild is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima Bhd and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad and Media Prima 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 Media Prima Bhd are associated (or correlated) with Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Media Prima i.e., Media Prima and Cengild Medical go up and down completely randomly.
Pair Corralation between Media Prima and Cengild Medical
Assuming the 90 days trading horizon Media Prima is expected to generate 92.58 times less return on investment than Cengild Medical. But when comparing it to its historical volatility, Media Prima Bhd is 2.86 times less risky than Cengild Medical. It trades about 0.0 of its potential returns per unit of risk. Cengild Medical Berhad is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Cengild Medical Berhad on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Cengild Medical Berhad or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Prima Bhd vs. Cengild Medical Berhad
Performance |
| Timeline |
| Media Prima Bhd |
| Cengild Medical Berhad |
Media Prima and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and Cengild Medical
The main advantage of trading using opposite Media Prima and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.| Media Prima vs. Binasat Communications Bhd | Media Prima vs. Petronas Chemicals Group | Media Prima vs. Shangri La Hotels | Media Prima vs. Lotte Chemical Titan |
| Cengild Medical vs. Senheng New Retail | Cengild Medical vs. CSC Steel Holdings | Cengild Medical vs. Sports Toto Berhad | Cengild Medical vs. Star Media Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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