Correlation Between Eonmetall Group and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Eonmetall Group and Al Aqar 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 Eonmetall Group and Al Aqar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eonmetall Group Bhd and Al Aqar Healthcare, you can compare the effects of market volatilities on Eonmetall Group and Al Aqar 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 Eonmetall Group with a short position of Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eonmetall Group and Al Aqar.
Diversification Opportunities for Eonmetall Group and Al Aqar
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eonmetall and 5116 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eonmetall Group Bhd and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare and Eonmetall Group 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 Eonmetall Group Bhd are associated (or correlated) with Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Eonmetall Group i.e., Eonmetall Group and Al Aqar go up and down completely randomly.
Pair Corralation between Eonmetall Group and Al Aqar
Assuming the 90 days trading horizon Eonmetall Group Bhd is expected to generate 3.39 times more return on investment than Al Aqar. However, Eonmetall Group is 3.39 times more volatile than Al Aqar Healthcare. It trades about 0.0 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about -0.08 per unit of risk. If you would invest 30.00 in Eonmetall Group Bhd on November 18, 2024 and sell it today you would lose (1.00) from holding Eonmetall Group Bhd or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eonmetall Group Bhd vs. Al Aqar Healthcare
Performance |
| Timeline |
| Eonmetall Group Bhd |
| Al Aqar Healthcare |
Eonmetall Group and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eonmetall Group and Al Aqar
The main advantage of trading using opposite Eonmetall Group and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eonmetall Group position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.| Eonmetall Group vs. Resintech Bhd | Eonmetall Group vs. Mercury Industries Bhd | Eonmetall Group vs. Duopharma Biotech Bhd | Eonmetall Group vs. Sports Toto Berhad |
| Al Aqar vs. CB Industrial Product | Al Aqar vs. Press Metal Bhd | Al Aqar vs. Sapura Industrial Bhd | Al Aqar vs. Public Packages Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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