Correlation Between Media Prima and MISC Bhd
Can any of the company-specific risk be diversified away by investing in both Media Prima and MISC 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 Media Prima and MISC Bhd 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 MISC Bhd, you can compare the effects of market volatilities on Media Prima and MISC 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 Media Prima with a short position of MISC Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and MISC Bhd.
Diversification Opportunities for Media Prima and MISC Bhd
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and MISC is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima Bhd and MISC Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISC Bhd 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 MISC Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISC Bhd has no effect on the direction of Media Prima i.e., Media Prima and MISC Bhd go up and down completely randomly.
Pair Corralation between Media Prima and MISC Bhd
Assuming the 90 days trading horizon Media Prima Bhd is expected to generate 1.27 times more return on investment than MISC Bhd. However, Media Prima is 1.27 times more volatile than MISC Bhd. It trades about 0.03 of its potential returns per unit of risk. MISC Bhd is currently generating about -0.14 per unit of risk. If you would invest 46.00 in Media Prima Bhd on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Media Prima Bhd or generate 2.17% 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. MISC Bhd
Performance |
| Timeline |
| Media Prima Bhd |
| MISC Bhd |
Media Prima and MISC Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and MISC Bhd
The main advantage of trading using opposite Media Prima and MISC Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima position performs unexpectedly, MISC 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 MISC Bhd will offset losses from the drop in MISC Bhd's long position.| Media Prima vs. Binasat Communications Bhd | Media Prima vs. PIE Industrial Bhd | Media Prima vs. Star Media Group | Media Prima vs. Petronas Chemicals Group |
| MISC Bhd vs. Lyc Healthcare Bhd | MISC Bhd vs. Sunway Construction Group | MISC Bhd vs. Al Aqar Healthcare | MISC Bhd vs. Datasonic Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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