Correlation Between Tenaga Nasional and CIMB Group
Can any of the company-specific risk be diversified away by investing in both Tenaga Nasional and CIMB Group 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 CIMB Group 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 CIMB Group Holdings, you can compare the effects of market volatilities on Tenaga Nasional and CIMB Group 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 CIMB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaga Nasional and CIMB Group.
Diversification Opportunities for Tenaga Nasional and CIMB Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tenaga and CIMB is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tenaga Nasional Bhd and CIMB Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Group Holdings 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 CIMB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Group Holdings has no effect on the direction of Tenaga Nasional i.e., Tenaga Nasional and CIMB Group go up and down completely randomly.
Pair Corralation between Tenaga Nasional and CIMB Group
Assuming the 90 days trading horizon Tenaga Nasional Bhd is expected to under-perform the CIMB Group. In addition to that, Tenaga Nasional is 1.84 times more volatile than CIMB Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. CIMB Group Holdings is currently generating about 0.21 per unit of volatility. If you would invest 799.00 in CIMB Group Holdings on August 31, 2024 and sell it today you would earn a total of 26.00 from holding CIMB Group Holdings or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tenaga Nasional Bhd vs. CIMB Group Holdings
Performance |
| Timeline |
| Tenaga Nasional Bhd |
| CIMB Group Holdings |
Tenaga Nasional and CIMB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaga Nasional and CIMB Group
The main advantage of trading using opposite Tenaga Nasional and CIMB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaga Nasional position performs unexpectedly, CIMB Group 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 CIMB Group will offset losses from the drop in CIMB Group's long position.| Tenaga Nasional vs. Sports Toto Berhad | Tenaga Nasional vs. Lotte Chemical Titan | Tenaga Nasional vs. Mercury Industries Bhd | Tenaga Nasional vs. Media Prima Bhd |
| CIMB Group vs. KPJ Healthcare Bhd | CIMB Group vs. IHH Healthcare Bhd | CIMB Group vs. Apex Healthcare Bhd | CIMB Group vs. TAS Offshore 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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