Correlation Between Al Aqar and Fraser Neave
Can any of the company-specific risk be diversified away by investing in both Al Aqar and Fraser Neave 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 Fraser Neave 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 Fraser Neave Holdings, you can compare the effects of market volatilities on Al Aqar and Fraser Neave 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 Fraser Neave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Fraser Neave.
Diversification Opportunities for Al Aqar and Fraser Neave
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5116 and Fraser is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and Fraser Neave Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser Neave Holdings 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 Fraser Neave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser Neave Holdings has no effect on the direction of Al Aqar i.e., Al Aqar and Fraser Neave go up and down completely randomly.
Pair Corralation between Al Aqar and Fraser Neave
Assuming the 90 days trading horizon Al Aqar Healthcare is expected to generate 0.76 times more return on investment than Fraser Neave. However, Al Aqar Healthcare is 1.31 times less risky than Fraser Neave. It trades about -0.03 of its potential returns per unit of risk. Fraser Neave Holdings is currently generating about -0.37 per unit of risk. If you would invest 141.00 in Al Aqar Healthcare on September 3, 2024 and sell it today you would lose (1.00) from holding Al Aqar Healthcare or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Fraser Neave Holdings
Performance |
| Timeline |
| Al Aqar Healthcare |
| Fraser Neave Holdings |
Al Aqar and Fraser Neave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and Fraser Neave
The main advantage of trading using opposite Al Aqar and Fraser Neave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, Fraser Neave 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 Fraser Neave will offset losses from the drop in Fraser Neave's long position.| Al Aqar vs. Minetech Resources Bhd | Al Aqar vs. Swift Haulage Bhd | Al Aqar vs. Insas Bhd | Al Aqar vs. Bina Darulaman Bhd |
| Fraser Neave vs. Press Metal Bhd | Fraser Neave vs. Media Prima Bhd | Fraser Neave vs. KPJ Healthcare Bhd | Fraser Neave 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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