Correlation Between EA Technique and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both EA Technique 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 EA Technique and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Technique M and Binasat Communications Bhd, you can compare the effects of market volatilities on EA Technique 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 EA Technique with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Binasat Communications.
Diversification Opportunities for EA Technique and Binasat Communications
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 5259 and Binasat is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and EA Technique 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 EA Technique M 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 EA Technique i.e., EA Technique and Binasat Communications go up and down completely randomly.
Pair Corralation between EA Technique and Binasat Communications
Assuming the 90 days trading horizon EA Technique M is expected to generate 1.58 times more return on investment than Binasat Communications. However, EA Technique is 1.58 times more volatile than Binasat Communications Bhd. It trades about 0.06 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.01 per unit of risk. If you would invest 16.00 in EA Technique M on September 1, 2024 and sell it today you would earn a total of 14.00 from holding EA Technique M or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Technique M vs. Binasat Communications Bhd
Performance |
| Timeline |
| EA Technique M |
| Binasat Communications |
EA Technique and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Technique and Binasat Communications
The main advantage of trading using opposite EA Technique and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Technique 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.| EA Technique vs. Kobay Tech Bhd | EA Technique vs. CPE Technology Berhad | EA Technique vs. Star Media Group | EA Technique vs. Resintech Bhd |
| Binasat Communications vs. Cosmos Technology International | Binasat Communications vs. Senheng New Retail | Binasat Communications vs. SFP Tech Holdings | Binasat Communications vs. Minetech Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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