Correlation Between BP Plastics and MyTech Group
Can any of the company-specific risk be diversified away by investing in both BP Plastics and MyTech 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 BP Plastics and MyTech Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP Plastics Holding and MyTech Group Bhd, you can compare the effects of market volatilities on BP Plastics and MyTech 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 BP Plastics with a short position of MyTech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plastics and MyTech Group.
Diversification Opportunities for BP Plastics and MyTech Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5100 and MyTech is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BP Plastics Holding and MyTech Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyTech Group Bhd and BP Plastics 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 BP Plastics Holding are associated (or correlated) with MyTech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyTech Group Bhd has no effect on the direction of BP Plastics i.e., BP Plastics and MyTech Group go up and down completely randomly.
Pair Corralation between BP Plastics and MyTech Group
Assuming the 90 days trading horizon BP Plastics Holding is expected to generate 0.38 times more return on investment than MyTech Group. However, BP Plastics Holding is 2.6 times less risky than MyTech Group. It trades about -0.05 of its potential returns per unit of risk. MyTech Group Bhd is currently generating about -0.06 per unit of risk. If you would invest 135.00 in BP Plastics Holding on September 1, 2024 and sell it today you would lose (13.00) from holding BP Plastics Holding or give up 9.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP Plastics Holding vs. MyTech Group Bhd
Performance |
| Timeline |
| BP Plastics Holding |
| MyTech Group Bhd |
BP Plastics and MyTech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plastics and MyTech Group
The main advantage of trading using opposite BP Plastics and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plastics position performs unexpectedly, MyTech 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 MyTech Group will offset losses from the drop in MyTech Group's long position.| BP Plastics vs. Press Metal Bhd | BP Plastics vs. Central Industrial Corp | BP Plastics vs. Cosmos Technology International | BP Plastics vs. Binasat Communications Bhd |
| MyTech Group vs. Senheng New Retail | MyTech Group vs. Melewar Industrial Group | MyTech Group vs. Choo Bee Metal | MyTech Group vs. Silver Ridge Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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