Correlation Between Mr D and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Mr D and Binasat Communications 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 Mr D and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mr D I and Binasat Communications Bhd, you can compare the effects of market volatilities on Mr D and Binasat Communications 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 Mr D with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr D and Binasat Communications.
Diversification Opportunities for Mr D and Binasat Communications
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5296 and Binasat is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mr D I and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Mr D 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 Mr D I are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Mr D i.e., Mr D and Binasat Communications go up and down completely randomly.
Pair Corralation between Mr D and Binasat Communications
Assuming the 90 days trading horizon Mr D I is expected to under-perform the Binasat Communications. In addition to that, Mr D is 1.33 times more volatile than Binasat Communications Bhd. It trades about -0.18 of its total potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.16 per unit of volatility. If you would invest 22.00 in Binasat Communications Bhd on September 15, 2024 and sell it today you would lose (2.00) from holding Binasat Communications Bhd or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mr D I vs. Binasat Communications Bhd
Performance |
| Timeline |
| Mr D I |
| Binasat Communications |
Mr D and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr D and Binasat Communications
The main advantage of trading using opposite Mr D and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr D position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| Mr D vs. Binasat Communications Bhd | Mr D vs. Lotte Chemical Titan | Mr D vs. Berjaya Food Bhd | Mr D vs. TAS Offshore Bhd |
| Binasat Communications vs. Globetronics Tech Bhd | Binasat Communications vs. Duopharma Biotech Bhd | Binasat Communications vs. Kobay Tech Bhd | Binasat Communications vs. YX Precious Metals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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