Correlation Between Top Glove and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Top Glove and Sports Toto 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 Top Glove and Sports Toto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Glove and Sports Toto Berhad, you can compare the effects of market volatilities on Top Glove and Sports Toto 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 Top Glove with a short position of Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Glove and Sports Toto.
Diversification Opportunities for Top Glove and Sports Toto
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Top and Sports is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Top Glove and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad and Top Glove 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 Top Glove are associated (or correlated) with Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Top Glove i.e., Top Glove and Sports Toto go up and down completely randomly.
Pair Corralation between Top Glove and Sports Toto
Assuming the 90 days trading horizon Top Glove is expected to generate 1.44 times more return on investment than Sports Toto. However, Top Glove is 1.44 times more volatile than Sports Toto Berhad. It trades about 0.2 of its potential returns per unit of risk. Sports Toto Berhad is currently generating about -0.2 per unit of risk. If you would invest 107.00 in Top Glove on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Top Glove or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Glove vs. Sports Toto Berhad
Performance |
| Timeline |
| Top Glove |
| Sports Toto Berhad |
Top Glove and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Glove and Sports Toto
The main advantage of trading using opposite Top Glove and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Glove position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Top Glove vs. Sports Toto Berhad | Top Glove vs. ONETECH SOLUTIONS HOLDINGS | Top Glove vs. ES Ceramics Technology | Top Glove vs. JF Technology BHD |
| Sports Toto vs. Carlsberg Brewery Malaysia | Sports Toto vs. Alliance Financial Group | Sports Toto vs. Press Metal Bhd | Sports Toto vs. Impiana Hotels 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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