Correlation Between Sunway Construction and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and ES Ceramics 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 ES Ceramics 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 ES Ceramics Technology, you can compare the effects of market volatilities on Sunway Construction and ES Ceramics 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 ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and ES Ceramics.
Diversification Opportunities for Sunway Construction and ES Ceramics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunway and 0100 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology 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 ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Sunway Construction i.e., Sunway Construction and ES Ceramics go up and down completely randomly.
Pair Corralation between Sunway Construction and ES Ceramics
Assuming the 90 days trading horizon Sunway Construction Group is expected to under-perform the ES Ceramics. In addition to that, Sunway Construction is 1.03 times more volatile than ES Ceramics Technology. It trades about -0.29 of its total potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.19 per unit of volatility. If you would invest 17.00 in ES Ceramics Technology on November 7, 2024 and sell it today you would lose (3.00) from holding ES Ceramics Technology or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sunway Construction Group vs. ES Ceramics Technology
Performance |
| Timeline |
| Sunway Construction |
| ES Ceramics Technology |
Sunway Construction and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and ES Ceramics
The main advantage of trading using opposite Sunway Construction and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Sunway Construction vs. JAKS Resources Bhd | Sunway Construction vs. PESTECH International Bhd | Sunway Construction vs. Tadmax Resources Berhad | Sunway Construction vs. Pesona Metro Holdings |
| ES Ceramics vs. Kawan Food Bhd | ES Ceramics vs. Icon Offshore Bhd | ES Ceramics vs. Greatech Technology Bhd | ES Ceramics vs. Oriental Food Industries |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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