Correlation Between Media Prima and Star Media
Can any of the company-specific risk be diversified away by investing in both Media Prima 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 Media Prima and Star Media 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 Star Media Group, you can compare the effects of market volatilities on Media Prima 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 Media Prima with a short position of Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and Star Media.
Diversification Opportunities for Media Prima and Star Media
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and Star is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima 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 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 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 Media Prima i.e., Media Prima and Star Media go up and down completely randomly.
Pair Corralation between Media Prima and Star Media
Assuming the 90 days trading horizon Media Prima Bhd is expected to generate 1.03 times more return on investment than Star Media. However, Media Prima is 1.03 times more volatile than Star Media Group. It trades about 0.04 of its potential returns per unit of risk. Star Media Group is currently generating about 0.01 per unit of risk. If you would invest 39.00 in Media Prima Bhd on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Media Prima Bhd or generate 20.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.84% |
| Values | Daily Returns |
Media Prima Bhd vs. Star Media Group
Performance |
| Timeline |
| Media Prima Bhd |
| Star Media Group |
Media Prima and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and Star Media
The main advantage of trading using opposite Media Prima and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima 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.| Media Prima vs. Magni Tech Industries | Media Prima vs. ONETECH SOLUTIONS HOLDINGS | Media Prima vs. Resintech Bhd | Media Prima vs. Mycron Steel Bhd |
| Star Media vs. Melewar Industrial Group | Star Media vs. Binasat Communications Bhd | Star Media vs. Datasonic Group Bhd | Star Media vs. Eonmetall 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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