Correlation Between TIME Dotcom and Axiata Group
Can any of the company-specific risk be diversified away by investing in both TIME Dotcom and Axiata Group 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 TIME Dotcom and Axiata Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIME Dotcom Bhd and Axiata Group Bhd, you can compare the effects of market volatilities on TIME Dotcom and Axiata Group 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 TIME Dotcom with a short position of Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIME Dotcom and Axiata Group.
Diversification Opportunities for TIME Dotcom and Axiata Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TIME and Axiata is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding TIME Dotcom Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd and TIME Dotcom 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 TIME Dotcom Bhd are associated (or correlated) with Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of TIME Dotcom i.e., TIME Dotcom and Axiata Group go up and down completely randomly.
Pair Corralation between TIME Dotcom and Axiata Group
Assuming the 90 days trading horizon TIME Dotcom Bhd is expected to under-perform the Axiata Group. In addition to that, TIME Dotcom is 1.34 times more volatile than Axiata Group Bhd. It trades about -0.1 of its total potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.28 per unit of volatility. If you would invest 224.00 in Axiata Group Bhd on September 16, 2024 and sell it today you would earn a total of 13.00 from holding Axiata Group Bhd or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIME Dotcom Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| TIME Dotcom Bhd |
| Axiata Group Bhd |
TIME Dotcom and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIME Dotcom and Axiata Group
The main advantage of trading using opposite TIME Dotcom and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIME Dotcom position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| TIME Dotcom vs. Axiata Group Bhd | TIME Dotcom vs. Telekom Malaysia Bhd | TIME Dotcom vs. Binasat Communications Bhd |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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