Correlation Between Senheng New and Riverview Rubber
Can any of the company-specific risk be diversified away by investing in both Senheng New and Riverview Rubber 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 Riverview Rubber 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 Riverview Rubber Estates, you can compare the effects of market volatilities on Senheng New and Riverview Rubber 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 Riverview Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Riverview Rubber.
Diversification Opportunities for Senheng New and Riverview Rubber
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Senheng and Riverview is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Riverview Rubber Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverview Rubber Estates 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 Riverview Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverview Rubber Estates has no effect on the direction of Senheng New i.e., Senheng New and Riverview Rubber go up and down completely randomly.
Pair Corralation between Senheng New and Riverview Rubber
Assuming the 90 days trading horizon Senheng New Retail is expected to generate 0.8 times more return on investment than Riverview Rubber. However, Senheng New Retail is 1.25 times less risky than Riverview Rubber. It trades about 0.13 of its potential returns per unit of risk. Riverview Rubber Estates is currently generating about 0.02 per unit of risk. If you would invest 24.00 in Senheng New Retail on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Senheng New Retail or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. Riverview Rubber Estates
Performance |
| Timeline |
| Senheng New Retail |
| Riverview Rubber Estates |
Senheng New and Riverview Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Riverview Rubber
The main advantage of trading using opposite Senheng New and Riverview Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Riverview Rubber 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 Riverview Rubber will offset losses from the drop in Riverview Rubber's long position.| Senheng New vs. Radiant Globaltech Bhd | Senheng New vs. Digistar Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd |
| Riverview Rubber vs. Datasonic Group Bhd | Riverview Rubber vs. Malaysia Steel Works | Riverview Rubber vs. Sungei Bagan Rubber | Riverview Rubber vs. Aeon Credit Service |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |