Correlation Between Supermax Bhd and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Supermax Bhd 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 Supermax Bhd and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermax Bhd and Malayan Banking Bhd, you can compare the effects of market volatilities on Supermax Bhd 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 Supermax Bhd with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermax Bhd and Malayan Banking.
Diversification Opportunities for Supermax Bhd and Malayan Banking
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supermax and Malayan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Supermax 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 Supermax Bhd 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 Supermax 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 Supermax Bhd i.e., Supermax Bhd and Malayan Banking go up and down completely randomly.
Pair Corralation between Supermax Bhd and Malayan Banking
Assuming the 90 days trading horizon Supermax Bhd is expected to generate 5.07 times more return on investment than Malayan Banking. However, Supermax Bhd is 5.07 times more volatile than Malayan Banking Bhd. It trades about 0.1 of its potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.02 per unit of risk. If you would invest 81.00 in Supermax Bhd on November 2, 2024 and sell it today you would earn a total of 27.00 from holding Supermax Bhd or generate 33.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Supermax Bhd vs. Malayan Banking Bhd
Performance |
Timeline |
Supermax Bhd |
Malayan Banking Bhd |
Supermax Bhd and Malayan Banking Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Supermax Bhd and Malayan Banking
The main advantage of trading using opposite Supermax Bhd and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermax Bhd 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.Supermax Bhd vs. Malaysia Steel Works | Supermax Bhd vs. Southern Steel Bhd | Supermax Bhd vs. Datasonic Group Bhd | Supermax Bhd vs. ECM Libra Financial |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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