Correlation Between Sapura Energy and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both Sapura Energy and Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech Bhd, you can compare the effects of market volatilities on Sapura Energy and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Energy and Duopharma Biotech.
Diversification Opportunities for Sapura Energy and Duopharma Biotech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sapura and Duopharma is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Energy Bhd and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech Bhd 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of Sapura Energy i.e., Sapura Energy and Duopharma Biotech go up and down completely randomly.
Pair Corralation between Sapura Energy and Duopharma Biotech
Assuming the 90 days trading horizon Sapura Energy Bhd is expected to generate 7.72 times more return on investment than Duopharma Biotech. However, Sapura Energy is 7.72 times more volatile than Duopharma Biotech Bhd. It trades about 0.06 of its potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about 0.01 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Energy Bhd vs. Duopharma Biotech Bhd
Performance |
| Timeline |
| Sapura Energy Bhd |
| Duopharma Biotech Bhd |
Sapura Energy and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Energy and Duopharma Biotech
The main advantage of trading using opposite Sapura Energy and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Energy position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech'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 |
| Duopharma Biotech vs. Apex Healthcare Bhd | Duopharma Biotech vs. Nexgram Holdings Bhd | Duopharma Biotech vs. Techfast Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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