Correlation Between Choo Bee and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Axiata 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 Choo Bee and Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Choo Bee and Axiata 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 Choo Bee with a short position of Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Axiata Group.
Diversification Opportunities for Choo Bee and Axiata Group
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Choo and Axiata is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and Axiata Group go up and down completely randomly.
Pair Corralation between Choo Bee and Axiata Group
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Axiata Group. In addition to that, Choo Bee is 1.12 times more volatile than Axiata Group Bhd. It trades about -0.04 of its total potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.01 per unit of volatility. If you would invest 232.00 in Axiata Group Bhd on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Axiata Group Bhd or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Axiata Group Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Axiata Group Bhd |
Choo Bee and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Axiata Group
The main advantage of trading using opposite Choo Bee and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Axiata 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 Axiata Group will offset losses from the drop in Axiata Group'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 |
| Axiata Group vs. YX Precious Metals | Axiata Group vs. Berjaya Food Bhd | Axiata Group vs. YTL Hospitality REIT | Axiata Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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