Correlation Between Senheng New and Choo Bee
Can any of the company-specific risk be diversified away by investing in both Senheng New and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on Senheng New and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Choo Bee.
Diversification Opportunities for Senheng New and Choo Bee
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Senheng and Choo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of Senheng New i.e., Senheng New and Choo Bee go up and down completely randomly.
Pair Corralation between Senheng New and Choo Bee
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Choo Bee. In addition to that, Senheng New is 1.18 times more volatile than Choo Bee Metal. It trades about -0.07 of its total potential returns per unit of risk. Choo Bee Metal is currently generating about -0.02 per unit of volatility. If you would invest 95.00 in Choo Bee Metal on September 16, 2024 and sell it today you would lose (24.00) from holding Choo Bee Metal or give up 25.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. Choo Bee Metal
Performance |
| Timeline |
| Senheng New Retail |
| Choo Bee Metal |
Senheng New and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Choo Bee
The main advantage of trading using opposite Senheng New and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee'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 |
| Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. CSC Steel Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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