Correlation Between Choo Bee and Sunway Construction
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Sunway Construction 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 Choo Bee and Sunway Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Sunway Construction Group, you can compare the effects of market volatilities on Choo Bee and Sunway Construction 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 Choo Bee with a short position of Sunway Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Sunway Construction.
Diversification Opportunities for Choo Bee and Sunway Construction
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choo and Sunway is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Sunway Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway Construction and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Sunway Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Construction has no effect on the direction of Choo Bee i.e., Choo Bee and Sunway Construction go up and down completely randomly.
Pair Corralation between Choo Bee and Sunway Construction
Assuming the 90 days trading horizon Choo Bee Metal is expected to generate 0.99 times more return on investment than Sunway Construction. However, Choo Bee Metal is 1.01 times less risky than Sunway Construction. It trades about -0.07 of its potential returns per unit of risk. Sunway Construction Group is currently generating about -0.1 per unit of risk. If you would invest 78.00 in Choo Bee Metal on August 24, 2024 and sell it today you would lose (3.00) from holding Choo Bee Metal or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Choo Bee Metal vs. Sunway Construction Group
Performance |
| Timeline |
| Choo Bee Metal |
| Sunway Construction |
Choo Bee and Sunway Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Sunway Construction
The main advantage of trading using opposite Choo Bee and Sunway Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Sunway Construction 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 Sunway Construction will offset losses from the drop in Sunway Construction's long position.| Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. CSC Steel Holdings |
| Sunway Construction vs. PESTECH International Bhd | Sunway Construction vs. Pesona Metro Holdings | Sunway Construction vs. Central Industrial Corp | Sunway Construction vs. Protasco 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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