Correlation Between Senheng New and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Senheng New and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Senheng New and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and MI Technovation.
Diversification Opportunities for Senheng New and MI Technovation
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Senheng and 5286 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Senheng New i.e., Senheng New and MI Technovation go up and down completely randomly.
Pair Corralation between Senheng New and MI Technovation
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the MI Technovation. But the stock apears to be less risky and, when comparing its historical volatility, Senheng New Retail is 1.18 times less risky than MI Technovation. The stock trades about -0.06 of its potential returns per unit of risk. The MI Technovation Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 136.00 in MI Technovation Bhd on September 3, 2024 and sell it today you would earn a total of 81.00 from holding MI Technovation Bhd or generate 59.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. MI Technovation Bhd
Performance |
| Timeline |
| Senheng New Retail |
| MI Technovation Bhd |
Senheng New and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and MI Technovation
The main advantage of trading using opposite Senheng New and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| Senheng New vs. Mr D I | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage Bhd | Senheng New vs. Insas Bhd |
| MI Technovation vs. Scientex Packaging | MI Technovation vs. UNIQUE | MI Technovation vs. Dnonce Tech Bhd | MI Technovation vs. Protasco 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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