Correlation Between Sapura Energy and Top Glove
Can any of the company-specific risk be diversified away by investing in both Sapura Energy and Top Glove 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 Sapura Energy and Top Glove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Energy Bhd and Top Glove, you can compare the effects of market volatilities on Sapura Energy and Top Glove 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 Sapura Energy with a short position of Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Energy and Top Glove.
Diversification Opportunities for Sapura Energy and Top Glove
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sapura and Top is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Energy Bhd and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove and Sapura Energy 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 Sapura Energy Bhd are associated (or correlated) with Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of Sapura Energy i.e., Sapura Energy and Top Glove go up and down completely randomly.
Pair Corralation between Sapura Energy and Top Glove
Assuming the 90 days trading horizon Sapura Energy Bhd is expected to generate 3.21 times more return on investment than Top Glove. However, Sapura Energy is 3.21 times more volatile than Top Glove. It trades about 0.06 of its potential returns per unit of risk. Top Glove is currently generating about 0.07 per unit of risk. If you would invest 3.50 in Sapura Energy Bhd on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Sapura Energy Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Energy Bhd vs. Top Glove
Performance |
| Timeline |
| Sapura Energy Bhd |
| Top Glove |
Sapura Energy and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Energy and Top Glove
The main advantage of trading using opposite Sapura Energy and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Energy position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| Sapura Energy vs. Malayan Banking Bhd | Sapura Energy vs. Public Bank Bhd | Sapura Energy vs. Petronas Chemicals Group | Sapura Energy vs. Tenaga Nasional Bhd |
| Top Glove vs. Berjaya Food Bhd | Top Glove vs. Carlsberg Brewery Malaysia | Top Glove vs. Kawan Food Bhd | Top Glove vs. Malayan Banking 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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