Correlation Between Senheng New and Supercomnet Technologies
Can any of the company-specific risk be diversified away by investing in both Senheng New and Supercomnet Technologies 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 Senheng New and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senheng New Retail and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on Senheng New and Supercomnet Technologies 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 Senheng New with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Supercomnet Technologies.
Diversification Opportunities for Senheng New and Supercomnet Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senheng and Supercomnet is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and Senheng New 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 Senheng New Retail are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of Senheng New i.e., Senheng New and Supercomnet Technologies go up and down completely randomly.
Pair Corralation between Senheng New and Supercomnet Technologies
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Supercomnet Technologies. In addition to that, Senheng New is 1.42 times more volatile than Supercomnet Technologies Bhd. It trades about -0.02 of its total potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about 0.05 per unit of volatility. If you would invest 119.00 in Supercomnet Technologies Bhd on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Supercomnet Technologies Bhd or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. Supercomnet Technologies Bhd
Performance |
| Timeline |
| Senheng New Retail |
| Supercomnet Technologies |
Senheng New and Supercomnet Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Supercomnet Technologies
The main advantage of trading using opposite Senheng New and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.| Senheng New vs. Mr D I | Senheng New vs. Radiant Globaltech Bhd | Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd |
| Supercomnet Technologies vs. Homeritz Bhd | Supercomnet Technologies vs. Malayan Banking Bhd | Supercomnet Technologies vs. Media Prima Bhd | Supercomnet Technologies vs. Malaysia Steel Works |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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