Correlation Between Meridian Bhd and Mah Sing
Can any of the company-specific risk be diversified away by investing in both Meridian Bhd and Mah Sing 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 Meridian Bhd and Mah Sing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Bhd and Mah Sing Group, you can compare the effects of market volatilities on Meridian Bhd and Mah Sing 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 Meridian Bhd with a short position of Mah Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Bhd and Mah Sing.
Diversification Opportunities for Meridian Bhd and Mah Sing
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meridian and Mah is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Bhd and Mah Sing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mah Sing Group and Meridian Bhd 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 Meridian Bhd are associated (or correlated) with Mah Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mah Sing Group has no effect on the direction of Meridian Bhd i.e., Meridian Bhd and Mah Sing go up and down completely randomly.
Pair Corralation between Meridian Bhd and Mah Sing
Assuming the 90 days trading horizon Meridian Bhd is expected to generate 1.06 times less return on investment than Mah Sing. In addition to that, Meridian Bhd is 3.75 times more volatile than Mah Sing Group. It trades about 0.03 of its total potential returns per unit of risk. Mah Sing Group is currently generating about 0.14 per unit of volatility. If you would invest 75.00 in Mah Sing Group on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Mah Sing Group or generate 124.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Bhd vs. Mah Sing Group
Performance |
| Timeline |
| Meridian Bhd |
| Mah Sing Group |
Meridian Bhd and Mah Sing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Bhd and Mah Sing
The main advantage of trading using opposite Meridian Bhd and Mah Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Bhd position performs unexpectedly, Mah Sing 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 Mah Sing will offset losses from the drop in Mah Sing's long position.| Meridian Bhd vs. FARM FRESH BERHAD | Meridian Bhd vs. Alliance Financial Group | Meridian Bhd vs. Senheng New Retail | Meridian Bhd vs. CSC Steel Holdings |
| Mah Sing vs. Digistar Bhd | Mah Sing vs. Minetech Resources Bhd | Mah Sing vs. Swift Haulage Bhd | Mah Sing vs. Bina Darulaman 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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