Correlation Between Bank Islam and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Bank Islam and Sports Toto 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 Bank Islam and Sports Toto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Islam Malaysia and Sports Toto Berhad, you can compare the effects of market volatilities on Bank Islam and Sports Toto 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 Bank Islam with a short position of Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Islam and Sports Toto.
Diversification Opportunities for Bank Islam and Sports Toto
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Sports is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank Islam Malaysia and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad and Bank Islam 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 Bank Islam Malaysia are associated (or correlated) with Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Bank Islam i.e., Bank Islam and Sports Toto go up and down completely randomly.
Pair Corralation between Bank Islam and Sports Toto
Assuming the 90 days trading horizon Bank Islam Malaysia is expected to generate 0.59 times more return on investment than Sports Toto. However, Bank Islam Malaysia is 1.69 times less risky than Sports Toto. It trades about 0.27 of its potential returns per unit of risk. Sports Toto Berhad is currently generating about -0.34 per unit of risk. If you would invest 246.00 in Bank Islam Malaysia on December 11, 2024 and sell it today you would earn a total of 11.00 from holding Bank Islam Malaysia or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Islam Malaysia vs. Sports Toto Berhad
Performance |
| Timeline |
| Bank Islam Malaysia |
| Sports Toto Berhad |
Bank Islam and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Islam and Sports Toto
The main advantage of trading using opposite Bank Islam and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Islam position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Bank Islam vs. Malayan Banking Bhd | Bank Islam vs. Public Bank Bhd | Bank Islam vs. Petronas Chemicals Group | Bank Islam vs. IHH Healthcare Bhd |
| Sports Toto vs. Dataprep Holdings Bhd | Sports Toto vs. Kossan Rubber Industries | Sports Toto vs. Riverview Rubber Estates | Sports Toto vs. Rubberex M |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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