Correlation Between Minetech Resources and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Minetech Resources and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Minetech Resources and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Axiata Group.
Diversification Opportunities for Minetech Resources and Axiata Group
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minetech and Axiata is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Minetech Resources i.e., Minetech Resources and Axiata Group go up and down completely randomly.
Pair Corralation between Minetech Resources and Axiata Group
Assuming the 90 days trading horizon Minetech Resources is expected to generate 1.96 times less return on investment than Axiata Group. In addition to that, Minetech Resources is 3.21 times more volatile than Axiata Group Bhd. It trades about 0.02 of its total potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.12 per unit of volatility. If you would invest 226.00 in Axiata Group Bhd on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Axiata Group Bhd or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| Minetech Resources Bhd |
| Axiata Group Bhd |
Minetech Resources and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Axiata Group
The main advantage of trading using opposite Minetech Resources and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| Minetech Resources vs. Digistar Bhd | Minetech Resources vs. Swift Haulage Bhd | Minetech Resources vs. Bina Darulaman Bhd | Minetech Resources vs. Sunzen Biotech Bhd |
| Axiata Group vs. PMB Technology Bhd | Axiata Group vs. Duopharma Biotech Bhd | Axiata Group vs. Sports Toto Berhad | Axiata Group vs. Aurelius Technologies 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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