Correlation Between Mr D and Senheng New
Can any of the company-specific risk be diversified away by investing in both Mr D and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Mr D and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr D and Senheng New.
Diversification Opportunities for Mr D and Senheng New
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5296 and Senheng is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mr D I and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Mr D i.e., Mr D and Senheng New go up and down completely randomly.
Pair Corralation between Mr D and Senheng New
Assuming the 90 days trading horizon Mr D I is expected to generate 0.77 times more return on investment than Senheng New. However, Mr D I is 1.3 times less risky than Senheng New. It trades about 0.04 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.04 per unit of risk. If you would invest 151.00 in Mr D I on September 4, 2024 and sell it today you would earn a total of 31.00 from holding Mr D I or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mr D I vs. Senheng New Retail
Performance |
| Timeline |
| Mr D I |
| Senheng New Retail |
Mr D and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr D and Senheng New
The main advantage of trading using opposite Mr D and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr D position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Mr D vs. Sports Toto Berhad | Mr D vs. Homeritz Bhd | Mr D vs. Star Media Group | Mr D vs. Sunway Construction Group |
| Senheng New vs. Mr D I | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Insas 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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