Correlation Between Sunway Construction and Choo Bee
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on Sunway Construction and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Choo Bee.
Diversification Opportunities for Sunway Construction and Choo Bee
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunway and Choo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of Sunway Construction i.e., Sunway Construction and Choo Bee go up and down completely randomly.
Pair Corralation between Sunway Construction and Choo Bee
Assuming the 90 days trading horizon Sunway Construction Group is expected to under-perform the Choo Bee. In addition to that, Sunway Construction is 2.68 times more volatile than Choo Bee Metal. It trades about -0.26 of its total potential returns per unit of risk. Choo Bee Metal is currently generating about -0.08 per unit of volatility. If you would invest 71.00 in Choo Bee Metal on November 9, 2024 and sell it today you would lose (2.00) from holding Choo Bee Metal or give up 2.82% 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. Choo Bee Metal
Performance |
| Timeline |
| Sunway Construction |
| Choo Bee Metal |
Sunway Construction and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Choo Bee
The main advantage of trading using opposite Sunway Construction and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.| Sunway Construction vs. Press Metal Bhd | Sunway Construction vs. Apex Healthcare Bhd | Sunway Construction vs. Public Packages Holdings | Sunway Construction vs. KPJ Healthcare Bhd |
| Choo Bee vs. Star Media Group | Choo Bee vs. Kluang Rubber | Choo Bee vs. Senheng New Retail | Choo Bee vs. Public Packages Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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