Correlation Between Bina Darulaman and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and Lysaght Galvanized 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 Lysaght Galvanized 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 Lysaght Galvanized Steel, you can compare the effects of market volatilities on Bina Darulaman and Lysaght Galvanized 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 Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and Lysaght Galvanized.
Diversification Opportunities for Bina Darulaman and Lysaght Galvanized
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bina and Lysaght is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel 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 Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between Bina Darulaman and Lysaght Galvanized
Assuming the 90 days trading horizon Bina Darulaman is expected to generate 9.94 times less return on investment than Lysaght Galvanized. But when comparing it to its historical volatility, Bina Darulaman Bhd is 2.89 times less risky than Lysaght Galvanized. It trades about 0.02 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 231.00 in Lysaght Galvanized Steel on September 2, 2024 and sell it today you would earn a total of 48.00 from holding Lysaght Galvanized Steel or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| Bina Darulaman Bhd |
| Lysaght Galvanized Steel |
Bina Darulaman and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and Lysaght Galvanized
The main advantage of trading using opposite Bina Darulaman and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized'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 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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