Correlation Between Tenaga Nasional and Radiant Globaltech
Can any of the company-specific risk be diversified away by investing in both Tenaga Nasional and Radiant Globaltech 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 Tenaga Nasional and Radiant Globaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaga Nasional Bhd and Radiant Globaltech Bhd, you can compare the effects of market volatilities on Tenaga Nasional and Radiant Globaltech 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 Tenaga Nasional with a short position of Radiant Globaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaga Nasional and Radiant Globaltech.
Diversification Opportunities for Tenaga Nasional and Radiant Globaltech
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tenaga and Radiant is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tenaga Nasional Bhd and Radiant Globaltech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Globaltech Bhd and Tenaga Nasional 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 Tenaga Nasional Bhd are associated (or correlated) with Radiant Globaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Globaltech Bhd has no effect on the direction of Tenaga Nasional i.e., Tenaga Nasional and Radiant Globaltech go up and down completely randomly.
Pair Corralation between Tenaga Nasional and Radiant Globaltech
Assuming the 90 days trading horizon Tenaga Nasional Bhd is expected to generate 0.5 times more return on investment than Radiant Globaltech. However, Tenaga Nasional Bhd is 2.01 times less risky than Radiant Globaltech. It trades about 0.0 of its potential returns per unit of risk. Radiant Globaltech Bhd is currently generating about -0.02 per unit of risk. If you would invest 1,384 in Tenaga Nasional Bhd on September 12, 2024 and sell it today you would lose (16.00) from holding Tenaga Nasional Bhd or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaga Nasional Bhd vs. Radiant Globaltech Bhd
Performance |
| Timeline |
| Tenaga Nasional Bhd |
| Radiant Globaltech Bhd |
Tenaga Nasional and Radiant Globaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaga Nasional and Radiant Globaltech
The main advantage of trading using opposite Tenaga Nasional and Radiant Globaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaga Nasional position performs unexpectedly, Radiant Globaltech 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 Radiant Globaltech will offset losses from the drop in Radiant Globaltech's long position.| Tenaga Nasional vs. Digistar Bhd | Tenaga Nasional vs. Minetech Resources Bhd | Tenaga Nasional vs. AirAsia X Bhd | Tenaga Nasional vs. OpenSys M Bhd |
| Radiant Globaltech vs. Mr D I | Radiant Globaltech vs. Senheng New Retail | Radiant Globaltech vs. Al Aqar Healthcare | Radiant Globaltech vs. PMB Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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