Correlation Between MI Technovation and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both MI Technovation and Resintech Bhd 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 MI Technovation and Resintech Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and Resintech Bhd, you can compare the effects of market volatilities on MI Technovation and Resintech Bhd 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 MI Technovation with a short position of Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and Resintech Bhd.
Diversification Opportunities for MI Technovation and Resintech Bhd
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5286 and Resintech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd and MI Technovation 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 MI Technovation Bhd are associated (or correlated) with Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of MI Technovation i.e., MI Technovation and Resintech Bhd go up and down completely randomly.
Pair Corralation between MI Technovation and Resintech Bhd
Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 1.43 times more return on investment than Resintech Bhd. However, MI Technovation is 1.43 times more volatile than Resintech Bhd. It trades about 0.04 of its potential returns per unit of risk. Resintech Bhd is currently generating about 0.05 per unit of risk. If you would invest 148.00 in MI Technovation Bhd on November 4, 2024 and sell it today you would earn a total of 72.00 from holding MI Technovation Bhd or generate 48.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. Resintech Bhd
Performance |
| Timeline |
| MI Technovation Bhd |
| Resintech Bhd |
MI Technovation and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and Resintech Bhd
The main advantage of trading using opposite MI Technovation and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| MI Technovation vs. Binasat Communications Bhd | MI Technovation vs. Melewar Industrial Group | MI Technovation vs. Cengild Medical Berhad | MI Technovation vs. Southern Steel Bhd |
| Resintech Bhd vs. Choo Bee Metal | Resintech Bhd vs. Sports Toto Berhad | Resintech Bhd vs. FARM FRESH BERHAD | Resintech Bhd vs. KPJ Healthcare 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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