Correlation Between Duopharma Biotech and Bonia Bhd
Can any of the company-specific risk be diversified away by investing in both Duopharma Biotech and Bonia 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 Duopharma Biotech and Bonia Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duopharma Biotech Bhd and Bonia Bhd, you can compare the effects of market volatilities on Duopharma Biotech and Bonia 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 Duopharma Biotech with a short position of Bonia Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duopharma Biotech and Bonia Bhd.
Diversification Opportunities for Duopharma Biotech and Bonia Bhd
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Duopharma and Bonia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Duopharma Biotech Bhd and Bonia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonia Bhd and Duopharma Biotech 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 Duopharma Biotech Bhd are associated (or correlated) with Bonia Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonia Bhd has no effect on the direction of Duopharma Biotech i.e., Duopharma Biotech and Bonia Bhd go up and down completely randomly.
Pair Corralation between Duopharma Biotech and Bonia Bhd
Assuming the 90 days trading horizon Duopharma Biotech Bhd is expected to generate 0.9 times more return on investment than Bonia Bhd. However, Duopharma Biotech Bhd is 1.11 times less risky than Bonia Bhd. It trades about -0.09 of its potential returns per unit of risk. Bonia Bhd is currently generating about -0.09 per unit of risk. If you would invest 129.00 in Duopharma Biotech Bhd on August 30, 2024 and sell it today you would lose (3.00) from holding Duopharma Biotech Bhd or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duopharma Biotech Bhd vs. Bonia Bhd
Performance |
| Timeline |
| Duopharma Biotech Bhd |
| Bonia Bhd |
Duopharma Biotech and Bonia Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duopharma Biotech and Bonia Bhd
The main advantage of trading using opposite Duopharma Biotech and Bonia Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duopharma Biotech position performs unexpectedly, Bonia 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 Bonia Bhd will offset losses from the drop in Bonia Bhd's long position.| Duopharma Biotech vs. Apex Healthcare Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Sunzen Biotech Bhd | Duopharma Biotech vs. Hengyuan Refining |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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