Correlation Between Sunway Construction and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Sunway Construction and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and MI Technovation.
Diversification Opportunities for Sunway Construction and MI Technovation
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunway and 5286 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Sunway Construction i.e., Sunway Construction and MI Technovation go up and down completely randomly.
Pair Corralation between Sunway Construction and MI Technovation
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.9 times more return on investment than MI Technovation. However, Sunway Construction Group is 1.11 times less risky than MI Technovation. It trades about 0.13 of its potential returns per unit of risk. MI Technovation Bhd is currently generating about 0.07 per unit of risk. If you would invest 159.00 in Sunway Construction Group on August 31, 2024 and sell it today you would earn a total of 271.00 from holding Sunway Construction Group or generate 170.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. MI Technovation Bhd
Performance |
| Timeline |
| Sunway Construction |
| MI Technovation Bhd |
Sunway Construction and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and MI Technovation
The main advantage of trading using opposite Sunway Construction and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's 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 |
| MI Technovation vs. British American Tobacco | MI Technovation vs. Hong Leong Bank | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Aeon Credit Service |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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