Correlation Between Bina Darulaman and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and ES Ceramics 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 Bina Darulaman and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bina Darulaman Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on Bina Darulaman and ES Ceramics 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 Bina Darulaman with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and ES Ceramics.
Diversification Opportunities for Bina Darulaman and ES Ceramics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bina and 0100 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Bina Darulaman 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 Bina Darulaman Bhd are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and ES Ceramics go up and down completely randomly.
Pair Corralation between Bina Darulaman and ES Ceramics
Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to generate 0.95 times more return on investment than ES Ceramics. However, Bina Darulaman Bhd is 1.05 times less risky than ES Ceramics. It trades about 0.02 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.02 per unit of risk. If you would invest 28.00 in Bina Darulaman Bhd on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Bina Darulaman Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.76% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. ES Ceramics Technology
Performance |
| Timeline |
| Bina Darulaman Bhd |
| ES Ceramics Technology |
Bina Darulaman and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and ES Ceramics
The main advantage of trading using opposite Bina Darulaman and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Bina Darulaman vs. Malayan Banking Bhd | Bina Darulaman vs. Public Bank Bhd | Bina Darulaman vs. Petronas Chemicals Group | Bina Darulaman vs. Tenaga Nasional Bhd |
| ES Ceramics vs. Minetech Resources Bhd | ES Ceramics vs. Swift Haulage Bhd | ES Ceramics vs. Insas Bhd | ES Ceramics vs. Bina Darulaman 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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