Correlation Between Techbond Group and Digistar Bhd
Can any of the company-specific risk be diversified away by investing in both Techbond Group and Digistar 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 Techbond Group and Digistar Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techbond Group Bhd and Digistar Bhd, you can compare the effects of market volatilities on Techbond Group and Digistar 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 Techbond Group with a short position of Digistar Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techbond Group and Digistar Bhd.
Diversification Opportunities for Techbond Group and Digistar Bhd
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Techbond and Digistar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Techbond Group Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and Techbond Group 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 Techbond Group Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of Techbond Group i.e., Techbond Group and Digistar Bhd go up and down completely randomly.
Pair Corralation between Techbond Group and Digistar Bhd
Assuming the 90 days trading horizon Techbond Group is expected to generate 1.98 times less return on investment than Digistar Bhd. But when comparing it to its historical volatility, Techbond Group Bhd is 2.25 times less risky than Digistar Bhd. It trades about 0.02 of its potential returns per unit of risk. Digistar Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Digistar Bhd on August 31, 2024 and sell it today you would lose (2.00) from holding Digistar Bhd or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Techbond Group Bhd vs. Digistar Bhd
Performance |
| Timeline |
| Techbond Group Bhd |
| Digistar Bhd |
Techbond Group and Digistar Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techbond Group and Digistar Bhd
The main advantage of trading using opposite Techbond Group and Digistar Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techbond Group position performs unexpectedly, Digistar 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 Digistar Bhd will offset losses from the drop in Digistar Bhd's long position.The idea behind Techbond Group Bhd and Digistar 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.| Digistar Bhd vs. Minetech Resources Bhd | Digistar Bhd vs. Choo Bee Metal | Digistar Bhd vs. Press Metal Bhd | Digistar Bhd vs. Pantech Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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