Correlation Between Tenaga Nasional and LPI Capital
Can any of the company-specific risk be diversified away by investing in both Tenaga Nasional and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on Tenaga Nasional and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaga Nasional and LPI Capital.
Diversification Opportunities for Tenaga Nasional and LPI Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tenaga and LPI is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tenaga Nasional Bhd and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of Tenaga Nasional i.e., Tenaga Nasional and LPI Capital go up and down completely randomly.
Pair Corralation between Tenaga Nasional and LPI Capital
Assuming the 90 days trading horizon Tenaga Nasional Bhd is expected to under-perform the LPI Capital. In addition to that, Tenaga Nasional is 2.05 times more volatile than LPI Capital Bhd. It trades about -0.05 of its total potential returns per unit of risk. LPI Capital Bhd is currently generating about -0.09 per unit of volatility. If you would invest 1,342 in LPI Capital Bhd on September 1, 2024 and sell it today you would lose (18.00) from holding LPI Capital Bhd or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaga Nasional Bhd vs. LPI Capital Bhd
Performance |
| Timeline |
| Tenaga Nasional Bhd |
| LPI Capital Bhd |
Tenaga Nasional and LPI Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaga Nasional and LPI Capital
The main advantage of trading using opposite Tenaga Nasional and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaga Nasional position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital's long position.| Tenaga Nasional vs. Impiana Hotels Bhd | Tenaga Nasional vs. Nova Wellness Group | Tenaga Nasional vs. CSC Steel Holdings | Tenaga Nasional vs. KPJ Healthcare Bhd |
| LPI Capital vs. Duopharma Biotech Bhd | LPI Capital vs. Sunzen Biotech Bhd | LPI Capital vs. Pantech Group Holdings | LPI Capital vs. Dataprep Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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