Correlation Between Minetech Resources and Senheng New
Can any of the company-specific risk be diversified away by investing in both Minetech Resources and Senheng New 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 Minetech Resources and Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minetech Resources Bhd and Senheng New Retail, you can compare the effects of market volatilities on Minetech Resources and Senheng New 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 Minetech Resources with a short position of Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Senheng New.
Diversification Opportunities for Minetech Resources and Senheng New
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Minetech and Senheng is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail and Minetech Resources 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 Minetech Resources Bhd are associated (or correlated) with Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Minetech Resources i.e., Minetech Resources and Senheng New go up and down completely randomly.
Pair Corralation between Minetech Resources and Senheng New
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to under-perform the Senheng New. In addition to that, Minetech Resources is 2.3 times more volatile than Senheng New Retail. It trades about -0.24 of its total potential returns per unit of risk. Senheng New Retail is currently generating about -0.13 per unit of volatility. If you would invest 26.00 in Senheng New Retail on November 28, 2024 and sell it today you would lose (2.00) from holding Senheng New Retail or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Minetech Resources Bhd |
| Senheng New Retail |
Minetech Resources and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Senheng New
The main advantage of trading using opposite Minetech Resources and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Minetech Resources vs. EA Technique M | Minetech Resources vs. Saudee Group Bhd | Minetech Resources vs. Digistar Bhd | Minetech Resources vs. AirAsia X Bhd |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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