Correlation Between Bina Darulaman and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on Bina Darulaman and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and Resintech Bhd.
Diversification Opportunities for Bina Darulaman and Resintech Bhd
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bina and Resintech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Resintech Bhd go up and down completely randomly.
Pair Corralation between Bina Darulaman and Resintech Bhd
Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to under-perform the Resintech Bhd. In addition to that, Bina Darulaman is 1.39 times more volatile than Resintech Bhd. It trades about -0.07 of its total potential returns per unit of risk. Resintech Bhd is currently generating about 0.08 per unit of volatility. If you would invest 58.00 in Resintech Bhd on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Resintech Bhd or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. Resintech Bhd
Performance |
| Timeline |
| Bina Darulaman Bhd |
| Resintech Bhd |
Bina Darulaman and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and Resintech Bhd
The main advantage of trading using opposite Bina Darulaman and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's 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 |
| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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