Correlation Between Tong Herr and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Tong Herr and Malayan Banking 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 Tong Herr and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Herr Resources and Malayan Banking Bhd, you can compare the effects of market volatilities on Tong Herr and Malayan Banking 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 Tong Herr with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Herr and Malayan Banking.
Diversification Opportunities for Tong Herr and Malayan Banking
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tong and Malayan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tong Herr Resources and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd and Tong Herr 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 Tong Herr Resources are associated (or correlated) with Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Tong Herr i.e., Tong Herr and Malayan Banking go up and down completely randomly.
Pair Corralation between Tong Herr and Malayan Banking
Assuming the 90 days trading horizon Tong Herr Resources is expected to under-perform the Malayan Banking. In addition to that, Tong Herr is 1.95 times more volatile than Malayan Banking Bhd. It trades about -0.25 of its total potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.15 per unit of volatility. If you would invest 1,046 in Malayan Banking Bhd on August 30, 2024 and sell it today you would lose (28.00) from holding Malayan Banking Bhd or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Herr Resources vs. Malayan Banking Bhd
Performance |
| Timeline |
| Tong Herr Resources |
| Malayan Banking Bhd |
Tong Herr and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Herr and Malayan Banking
The main advantage of trading using opposite Tong Herr and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Herr position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| Tong Herr vs. Malayan Banking Bhd | Tong Herr vs. Public Bank Bhd | Tong Herr vs. Petronas Chemicals Group | Tong Herr vs. IHH Healthcare Bhd |
| Malayan Banking vs. PIE Industrial Bhd | Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Binasat Communications Bhd | Malayan Banking vs. Choo Bee Metal |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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