Correlation Between Senheng New and Sapura Industrial
Can any of the company-specific risk be diversified away by investing in both Senheng New and Sapura Industrial 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 Sapura Industrial 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 Sapura Industrial Bhd, you can compare the effects of market volatilities on Senheng New and Sapura Industrial 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 Sapura Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and Sapura Industrial.
Diversification Opportunities for Senheng New and Sapura Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Senheng and Sapura is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail and Sapura Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapura Industrial 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 Sapura Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapura Industrial Bhd has no effect on the direction of Senheng New i.e., Senheng New and Sapura Industrial go up and down completely randomly.
Pair Corralation between Senheng New and Sapura Industrial
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the Sapura Industrial. In addition to that, Senheng New is 1.29 times more volatile than Sapura Industrial Bhd. It trades about -0.19 of its total potential returns per unit of risk. Sapura Industrial Bhd is currently generating about 0.04 per unit of volatility. If you would invest 88.00 in Sapura Industrial Bhd on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Sapura Industrial Bhd or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Senheng New Retail vs. Sapura Industrial Bhd
Performance |
| Timeline |
| Senheng New Retail |
| Sapura Industrial Bhd |
Senheng New and Sapura Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and Sapura Industrial
The main advantage of trading using opposite Senheng New and Sapura Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New position performs unexpectedly, Sapura Industrial 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 Sapura Industrial will offset losses from the drop in Sapura Industrial's long position.| Senheng New vs. Carlsberg Brewery Malaysia | Senheng New vs. Cloudpoint Technology Berhad | Senheng New vs. MClean Technologies Bhd | Senheng New vs. ES Ceramics Technology |
| Sapura Industrial vs. Icon Offshore Bhd | Sapura Industrial vs. Petronas Chemicals Group | Sapura Industrial vs. YX Precious Metals | Sapura Industrial vs. Choo Bee Metal |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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