Correlation Between AirAsia X and Tenaga Nasional
Can any of the company-specific risk be diversified away by investing in both AirAsia X and Tenaga Nasional 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 AirAsia X and Tenaga Nasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AirAsia X Bhd and Tenaga Nasional Bhd, you can compare the effects of market volatilities on AirAsia X and Tenaga Nasional 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 AirAsia X with a short position of Tenaga Nasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirAsia X and Tenaga Nasional.
Diversification Opportunities for AirAsia X and Tenaga Nasional
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AirAsia and Tenaga is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AirAsia X Bhd and Tenaga Nasional Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaga Nasional Bhd and AirAsia X 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 AirAsia X Bhd are associated (or correlated) with Tenaga Nasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaga Nasional Bhd has no effect on the direction of AirAsia X i.e., AirAsia X and Tenaga Nasional go up and down completely randomly.
Pair Corralation between AirAsia X and Tenaga Nasional
Assuming the 90 days trading horizon AirAsia X Bhd is expected to generate 1.67 times more return on investment than Tenaga Nasional. However, AirAsia X is 1.67 times more volatile than Tenaga Nasional Bhd. It trades about 0.03 of its potential returns per unit of risk. Tenaga Nasional Bhd is currently generating about -0.09 per unit of risk. If you would invest 190.00 in AirAsia X Bhd on September 12, 2024 and sell it today you would earn a total of 2.00 from holding AirAsia X Bhd or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirAsia X Bhd vs. Tenaga Nasional Bhd
Performance |
| Timeline |
| AirAsia X Bhd |
| Tenaga Nasional Bhd |
AirAsia X and Tenaga Nasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirAsia X and Tenaga Nasional
The main advantage of trading using opposite AirAsia X and Tenaga Nasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirAsia X position performs unexpectedly, Tenaga Nasional 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 Tenaga Nasional will offset losses from the drop in Tenaga Nasional's long position.| AirAsia X vs. K One Technology Bhd | AirAsia X vs. Cosmos Technology International | AirAsia X vs. Melewar Industrial Group | AirAsia X vs. Cloudpoint Technology Berhad |
| Tenaga Nasional vs. Digistar Bhd | Tenaga Nasional vs. Minetech Resources Bhd | Tenaga Nasional vs. AirAsia X Bhd | Tenaga Nasional vs. OpenSys M 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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