Correlation Between Bina Darulaman and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and Malayan Banking 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 Malayan Banking 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 Malayan Banking Bhd, you can compare the effects of market volatilities on Bina Darulaman and Malayan Banking 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 Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and Malayan Banking.
Diversification Opportunities for Bina Darulaman and Malayan Banking
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bina and Malayan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd 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 Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Malayan Banking go up and down completely randomly.
Pair Corralation between Bina Darulaman and Malayan Banking
Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to generate 2.93 times more return on investment than Malayan Banking. However, Bina Darulaman is 2.93 times more volatile than Malayan Banking Bhd. It trades about 0.01 of its potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.14 per unit of risk. If you would invest 28.00 in Bina Darulaman Bhd on September 12, 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 | 100.0% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. Malayan Banking Bhd
Performance |
| Timeline |
| Bina Darulaman Bhd |
| Malayan Banking Bhd |
Bina Darulaman and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and Malayan Banking
The main advantage of trading using opposite Bina Darulaman and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| Bina Darulaman vs. British American Tobacco | Bina Darulaman vs. Shangri La Hotels | Bina Darulaman vs. Farm Price Holdings | Bina Darulaman vs. CSC Steel Holdings |
| Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Choo Bee Metal | Malayan Banking vs. YX Precious Metals | Malayan Banking vs. Computer Forms 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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