Correlation Between Sunway Construction and YX Precious
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on Sunway Construction and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and YX Precious.
Diversification Opportunities for Sunway Construction and YX Precious
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunway and 0250 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of Sunway Construction i.e., Sunway Construction and YX Precious go up and down completely randomly.
Pair Corralation between Sunway Construction and YX Precious
Assuming the 90 days trading horizon Sunway Construction Group is expected to under-perform the YX Precious. In addition to that, Sunway Construction is 1.44 times more volatile than YX Precious Metals. It trades about -0.11 of its total potential returns per unit of risk. YX Precious Metals is currently generating about -0.06 per unit of volatility. If you would invest 27.00 in YX Precious Metals on October 31, 2024 and sell it today you would lose (3.00) from holding YX Precious Metals or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. YX Precious Metals
Performance |
| Timeline |
| Sunway Construction |
| YX Precious Metals |
Sunway Construction and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and YX Precious
The main advantage of trading using opposite Sunway Construction and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| Sunway Construction vs. Sapura Industrial Bhd | Sunway Construction vs. SSF Home Group | Sunway Construction vs. Resintech Bhd | Sunway Construction vs. CPE Technology Berhad |
| YX Precious vs. Kluang Rubber | YX Precious vs. Eonmetall Group Bhd | YX Precious vs. Sungei Bagan Rubber | YX Precious vs. PIE Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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