Correlation Between Resintech Bhd and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and Binasat Communications 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 Resintech Bhd and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Resintech Bhd and Binasat Communications 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 Resintech Bhd with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and Binasat Communications.
Diversification Opportunities for Resintech Bhd and Binasat Communications
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Resintech and Binasat is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Resintech Bhd 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 Resintech Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and Binasat Communications go up and down completely randomly.
Pair Corralation between Resintech Bhd and Binasat Communications
Assuming the 90 days trading horizon Resintech Bhd is expected to generate 0.69 times more return on investment than Binasat Communications. However, Resintech Bhd is 1.44 times less risky than Binasat Communications. It trades about 0.07 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.02 per unit of risk. If you would invest 48.00 in Resintech Bhd on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Resintech Bhd or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| Resintech Bhd |
| Binasat Communications |
Resintech Bhd and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and Binasat Communications
The main advantage of trading using opposite Resintech Bhd and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd vs. Bina Darulaman Bhd |
| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. Swift Haulage Bhd | Binasat Communications vs. Bina Darulaman 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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