Correlation Between Al Aqar and Batu Kawan
Can any of the company-specific risk be diversified away by investing in both Al Aqar and Batu Kawan 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 Al Aqar and Batu Kawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Aqar Healthcare and Batu Kawan Bhd, you can compare the effects of market volatilities on Al Aqar and Batu Kawan 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 Al Aqar with a short position of Batu Kawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Batu Kawan.
Diversification Opportunities for Al Aqar and Batu Kawan
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5116 and Batu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and Batu Kawan Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batu Kawan Bhd and Al Aqar 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 Al Aqar Healthcare are associated (or correlated) with Batu Kawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batu Kawan Bhd has no effect on the direction of Al Aqar i.e., Al Aqar and Batu Kawan go up and down completely randomly.
Pair Corralation between Al Aqar and Batu Kawan
Assuming the 90 days trading horizon Al Aqar Healthcare is expected to generate 1.34 times more return on investment than Batu Kawan. However, Al Aqar is 1.34 times more volatile than Batu Kawan Bhd. It trades about 0.04 of its potential returns per unit of risk. Batu Kawan Bhd is currently generating about 0.0 per unit of risk. If you would invest 115.00 in Al Aqar Healthcare on September 14, 2024 and sell it today you would earn a total of 23.00 from holding Al Aqar Healthcare or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.52% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Batu Kawan Bhd
Performance |
| Timeline |
| Al Aqar Healthcare |
| Batu Kawan Bhd |
Al Aqar and Batu Kawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and Batu Kawan
The main advantage of trading using opposite Al Aqar and Batu Kawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, Batu Kawan 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 Batu Kawan will offset losses from the drop in Batu Kawan's long position.| Al Aqar vs. Eonmetall Group Bhd | Al Aqar vs. YX Precious Metals | Al Aqar vs. Public Bank Bhd | Al Aqar vs. IHH Healthcare Bhd |
| Batu Kawan vs. Nova Wellness Group | Batu Kawan vs. Senheng New Retail | Batu Kawan vs. Kluang Rubber | Batu Kawan vs. Al Aqar Healthcare |
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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