Correlation Between FGV Holdings and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both FGV Holdings and Binasat Communications 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 FGV Holdings and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGV Holdings Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on FGV Holdings and Binasat Communications 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 FGV Holdings with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGV Holdings and Binasat Communications.
Diversification Opportunities for FGV Holdings and Binasat Communications
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FGV and Binasat is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and FGV Holdings 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 FGV Holdings Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of FGV Holdings i.e., FGV Holdings and Binasat Communications go up and down completely randomly.
Pair Corralation between FGV Holdings and Binasat Communications
Assuming the 90 days trading horizon FGV Holdings Bhd is expected to generate 0.61 times more return on investment than Binasat Communications. However, FGV Holdings Bhd is 1.65 times less risky than Binasat Communications. It trades about -0.03 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.05 per unit of risk. If you would invest 136.00 in FGV Holdings Bhd on September 14, 2024 and sell it today you would lose (23.00) from holding FGV Holdings Bhd or give up 16.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FGV Holdings Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| FGV Holdings Bhd |
| Binasat Communications |
FGV Holdings and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGV Holdings and Binasat Communications
The main advantage of trading using opposite FGV Holdings and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| FGV Holdings vs. Binasat Communications Bhd | FGV Holdings vs. Berjaya Food Bhd | FGV Holdings vs. Choo Bee Metal | FGV Holdings vs. Aeon Credit Service |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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