Correlation Between Tambun Indah and Sapura Industrial
Can any of the company-specific risk be diversified away by investing in both Tambun Indah and Sapura Industrial 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 Tambun Indah and Sapura Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tambun Indah Land and Sapura Industrial Bhd, you can compare the effects of market volatilities on Tambun Indah and Sapura Industrial 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 Tambun Indah with a short position of Sapura Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tambun Indah and Sapura Industrial.
Diversification Opportunities for Tambun Indah and Sapura Industrial
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tambun and Sapura is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tambun Indah Land and Sapura Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapura Industrial Bhd and Tambun Indah 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 Tambun Indah Land are associated (or correlated) with Sapura Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapura Industrial Bhd has no effect on the direction of Tambun Indah i.e., Tambun Indah and Sapura Industrial go up and down completely randomly.
Pair Corralation between Tambun Indah and Sapura Industrial
Assuming the 90 days trading horizon Tambun Indah Land is expected to generate 0.45 times more return on investment than Sapura Industrial. However, Tambun Indah Land is 2.23 times less risky than Sapura Industrial. It trades about 0.13 of its potential returns per unit of risk. Sapura Industrial Bhd is currently generating about -0.08 per unit of risk. If you would invest 89.00 in Tambun Indah Land on October 23, 2024 and sell it today you would earn a total of 2.00 from holding Tambun Indah Land or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tambun Indah Land vs. Sapura Industrial Bhd
Performance |
| Timeline |
| Tambun Indah Land |
| Sapura Industrial Bhd |
Tambun Indah and Sapura Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tambun Indah and Sapura Industrial
The main advantage of trading using opposite Tambun Indah and Sapura Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tambun Indah position performs unexpectedly, Sapura Industrial 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 Sapura Industrial will offset losses from the drop in Sapura Industrial's long position.| Tambun Indah vs. Carlsberg Brewery Malaysia | Tambun Indah vs. Petronas Chemicals Group | Tambun Indah vs. Oriental Food Industries | Tambun Indah vs. Senheng New Retail |
| Sapura Industrial vs. Bank Islam Malaysia | Sapura Industrial vs. Central Industrial Corp | Sapura Industrial vs. Alliance Financial Group | Sapura Industrial vs. Cloudpoint Technology Berhad |
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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