Correlation Between Minetech Resources and Kamdar Group
Can any of the company-specific risk be diversified away by investing in both Minetech Resources and Kamdar 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 Kamdar 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 Kamdar Group Bhd, you can compare the effects of market volatilities on Minetech Resources and Kamdar 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 Kamdar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Kamdar Group.
Diversification Opportunities for Minetech Resources and Kamdar Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Minetech and Kamdar is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and Kamdar Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamdar 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 Kamdar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamdar Group Bhd has no effect on the direction of Minetech Resources i.e., Minetech Resources and Kamdar Group go up and down completely randomly.
Pair Corralation between Minetech Resources and Kamdar Group
Assuming the 90 days trading horizon Minetech Resources is expected to generate 25.93 times less return on investment than Kamdar Group. But when comparing it to its historical volatility, Minetech Resources Bhd is 1.18 times less risky than Kamdar Group. It trades about 0.02 of its potential returns per unit of risk. Kamdar Group Bhd is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Kamdar Group Bhd on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Kamdar Group Bhd or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Kamdar Group Bhd
Performance |
| Timeline |
| Minetech Resources Bhd |
| Kamdar Group Bhd |
Minetech Resources and Kamdar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Kamdar Group
The main advantage of trading using opposite Minetech Resources and Kamdar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources position performs unexpectedly, Kamdar 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 Kamdar Group will offset losses from the drop in Kamdar Group's long position.| Minetech Resources vs. Swift Haulage Bhd | Minetech Resources vs. Insas Bhd | Minetech Resources vs. Bina Darulaman Bhd | Minetech Resources vs. Sunzen Biotech Bhd |
| Kamdar Group vs. Malayan Banking Bhd | Kamdar Group vs. Public Bank Bhd | Kamdar Group vs. Petronas Chemicals Group | Kamdar Group vs. Tenaga Nasional 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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