Correlation Between Sunway Construction and Daya Materials
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and Daya Materials 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 Sunway Construction and Daya Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and Daya Materials Bhd, you can compare the effects of market volatilities on Sunway Construction and Daya Materials 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 Sunway Construction with a short position of Daya Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Daya Materials.
Diversification Opportunities for Sunway Construction and Daya Materials
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunway and Daya is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Sunway Construction 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 Sunway Construction Group are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Sunway Construction i.e., Sunway Construction and Daya Materials go up and down completely randomly.
Pair Corralation between Sunway Construction and Daya Materials
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.77 times more return on investment than Daya Materials. However, Sunway Construction Group is 1.29 times less risky than Daya Materials. It trades about 0.1 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about -0.02 per unit of risk. If you would invest 313.00 in Sunway Construction Group on August 31, 2024 and sell it today you would earn a total of 117.00 from holding Sunway Construction Group or generate 37.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sunway Construction Group vs. Daya Materials Bhd
Performance |
| Timeline |
| Sunway Construction |
| Daya Materials Bhd |
Sunway Construction and Daya Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Daya Materials
The main advantage of trading using opposite Sunway Construction and Daya Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, Daya Materials 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 Daya Materials will offset losses from the drop in Daya Materials' long position.| Sunway Construction vs. Kossan Rubber Industries | Sunway Construction vs. Cloudpoint Technology Berhad | Sunway Construction vs. Uchi Technologies Bhd | Sunway Construction vs. Awanbiru Technology Bhd |
| Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd | Daya Materials vs. Swift Haulage 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |