Correlation Between Senheng New and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Senheng New and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Senheng New and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Asian Pac.
Diversification Opportunities for Senheng New and Asian Pac
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senheng and Asian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Senheng New i.e., Senheng New and Asian Pac go up and down completely randomly.
Pair Corralation between Senheng New and Asian Pac
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Asian Pac. But the stock apears to be less risky and, when comparing its historical volatility, Senheng New Retail is 1.79 times less risky than Asian Pac. The stock trades about -0.05 of its potential returns per unit of risk. The Asian Pac Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Asian Pac Holdings on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Asian Pac Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Senheng New Retail vs. Asian Pac Holdings
Performance |
| Timeline |
| Senheng New Retail |
| Asian Pac Holdings |
Senheng New and Asian Pac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Asian Pac
The main advantage of trading using opposite Senheng New and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.| Senheng New vs. Pantech Group Holdings | Senheng New vs. Supercomnet Technologies Bhd | Senheng New vs. MI Technovation Bhd | Senheng New vs. YX Precious Metals |
| Asian Pac vs. Aeon Credit Service | Asian Pac vs. Senheng New Retail | Asian Pac vs. Alliance Financial Group | Asian Pac vs. Press Metal 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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