Correlation Between Sunway Construction and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and TAS Offshore 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 TAS Offshore 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 TAS Offshore Bhd, you can compare the effects of market volatilities on Sunway Construction and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and TAS Offshore.
Diversification Opportunities for Sunway Construction and TAS Offshore
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunway and TAS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Sunway Construction i.e., Sunway Construction and TAS Offshore go up and down completely randomly.
Pair Corralation between Sunway Construction and TAS Offshore
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 1.01 times more return on investment than TAS Offshore. However, Sunway Construction is 1.01 times more volatile than TAS Offshore Bhd. It trades about 0.01 of its potential returns per unit of risk. TAS Offshore Bhd is currently generating about -0.19 per unit of risk. If you would invest 457.00 in Sunway Construction Group on August 26, 2024 and sell it today you would lose (1.00) from holding Sunway Construction Group or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. TAS Offshore Bhd
Performance |
| Timeline |
| Sunway Construction |
| TAS Offshore Bhd |
Sunway Construction and TAS Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and TAS Offshore
The main advantage of trading using opposite Sunway Construction and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.The idea behind Sunway Construction Group and TAS Offshore Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TAS Offshore vs. Genetec Technology Bhd | TAS Offshore vs. PIE Industrial Bhd | TAS Offshore vs. JF Technology 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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