Correlation Between Senheng New and Awanbiru Technology
Can any of the company-specific risk be diversified away by investing in both Senheng New and Awanbiru Technology 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 Awanbiru Technology 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 Awanbiru Technology Bhd, you can compare the effects of market volatilities on Senheng New and Awanbiru Technology 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 Awanbiru Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Awanbiru Technology.
Diversification Opportunities for Senheng New and Awanbiru Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senheng and Awanbiru is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Awanbiru Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awanbiru Technology 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 Awanbiru Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awanbiru Technology Bhd has no effect on the direction of Senheng New i.e., Senheng New and Awanbiru Technology go up and down completely randomly.
Pair Corralation between Senheng New and Awanbiru Technology
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Awanbiru Technology. But the stock apears to be less risky and, when comparing its historical volatility, Senheng New Retail is 2.39 times less risky than Awanbiru Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Awanbiru Technology Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Awanbiru Technology Bhd on September 16, 2024 and sell it today you would lose (5.00) from holding Awanbiru Technology Bhd or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. Awanbiru Technology Bhd
Performance |
| Timeline |
| Senheng New Retail |
| Awanbiru Technology Bhd |
Senheng New and Awanbiru Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Awanbiru Technology
The main advantage of trading using opposite Senheng New and Awanbiru Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Awanbiru Technology 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 Awanbiru Technology will offset losses from the drop in Awanbiru Technology's long position.| Senheng New vs. Apex Healthcare Bhd | Senheng New vs. Sports Toto Berhad | Senheng New vs. YX Precious Metals | Senheng New vs. Kawan Food Bhd |
| Awanbiru Technology vs. Datasonic Group Bhd | Awanbiru Technology vs. Dataprep Holdings Bhd | Awanbiru Technology vs. Systech Bhd | Awanbiru Technology vs. TechnoDex 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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