Correlation Between Senheng New and Telekom Malaysia
Can any of the company-specific risk be diversified away by investing in both Senheng New and Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia Bhd, you can compare the effects of market volatilities on Senheng New and Telekom Malaysia 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 Telekom Malaysia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Telekom Malaysia.
Diversification Opportunities for Senheng New and Telekom Malaysia
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senheng and Telekom is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Telekom Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Malaysia Bhd 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 Telekom Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Malaysia Bhd has no effect on the direction of Senheng New i.e., Senheng New and Telekom Malaysia go up and down completely randomly.
Pair Corralation between Senheng New and Telekom Malaysia
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Telekom Malaysia. In addition to that, Senheng New is 2.01 times more volatile than Telekom Malaysia Bhd. It trades about -0.06 of its total potential returns per unit of risk. Telekom Malaysia Bhd is currently generating about 0.06 per unit of volatility. If you would invest 499.00 in Telekom Malaysia Bhd on September 18, 2024 and sell it today you would earn a total of 174.00 from holding Telekom Malaysia Bhd or generate 34.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Senheng New Retail vs. Telekom Malaysia Bhd
Performance |
| Timeline |
| Senheng New Retail |
| Telekom Malaysia Bhd |
Senheng New and Telekom Malaysia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Telekom Malaysia
The main advantage of trading using opposite Senheng New and Telekom Malaysia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Telekom Malaysia 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 Telekom Malaysia will offset losses from the drop in Telekom Malaysia's long position.| Senheng New vs. Mr D I | Senheng New vs. Radiant Globaltech Bhd | Senheng New vs. Al Aqar Healthcare | Senheng New vs. PMB Technology Bhd |
| Telekom Malaysia vs. Awanbiru Technology Bhd | Telekom Malaysia vs. YX Precious Metals | Telekom Malaysia vs. Shangri La Hotels | Telekom Malaysia vs. Petronas Chemicals Group |
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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