Correlation Between Resintech Bhd and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and Alliance Financial 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 Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and Alliance Financial Group, you can compare the effects of market volatilities on Resintech Bhd and Alliance Financial 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 Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and Alliance Financial.
Diversification Opportunities for Resintech Bhd and Alliance Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Resintech and Alliance is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial 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 Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and Alliance Financial go up and down completely randomly.
Pair Corralation between Resintech Bhd and Alliance Financial
Assuming the 90 days trading horizon Resintech Bhd is expected to under-perform the Alliance Financial. But the stock apears to be less risky and, when comparing its historical volatility, Resintech Bhd is 1.2 times less risky than Alliance Financial. The stock trades about -0.11 of its potential returns per unit of risk. The Alliance Financial Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 445.00 in Alliance Financial Group on August 30, 2024 and sell it today you would earn a total of 46.00 from holding Alliance Financial Group or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. Alliance Financial Group
Performance |
| Timeline |
| Resintech Bhd |
| Alliance Financial |
Resintech Bhd and Alliance Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and Alliance Financial
The main advantage of trading using opposite Resintech Bhd and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.| Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Sunzen Biotech Bhd | Resintech Bhd vs. Hengyuan Refining | Resintech Bhd vs. Impiana Hotels Bhd |
| Alliance Financial vs. Pantech Group Holdings | Alliance Financial vs. Sunzen Biotech Bhd | Alliance Financial vs. MClean Technologies Bhd | Alliance Financial vs. Malayan Banking 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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