Correlation Between MyTech Group and BP Plastics
Can any of the company-specific risk be diversified away by investing in both MyTech Group and BP Plastics 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 MyTech Group and BP Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MyTech Group Bhd and BP Plastics Holding, you can compare the effects of market volatilities on MyTech Group and BP Plastics 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 MyTech Group with a short position of BP Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MyTech Group and BP Plastics.
Diversification Opportunities for MyTech Group and BP Plastics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MyTech and 5100 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MyTech Group Bhd and BP Plastics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP Plastics Holding and MyTech Group 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 MyTech Group Bhd are associated (or correlated) with BP Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP Plastics Holding has no effect on the direction of MyTech Group i.e., MyTech Group and BP Plastics go up and down completely randomly.
Pair Corralation between MyTech Group and BP Plastics
Assuming the 90 days trading horizon MyTech Group Bhd is expected to under-perform the BP Plastics. In addition to that, MyTech Group is 2.6 times more volatile than BP Plastics Holding. It trades about -0.06 of its total potential returns per unit of risk. BP Plastics Holding is currently generating about -0.05 per unit of volatility. If you would invest 135.00 in BP Plastics Holding on September 1, 2024 and sell it today you would lose (13.00) from holding BP Plastics Holding or give up 9.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MyTech Group Bhd vs. BP Plastics Holding
Performance |
| Timeline |
| MyTech Group Bhd |
| BP Plastics Holding |
MyTech Group and BP Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MyTech Group and BP Plastics
The main advantage of trading using opposite MyTech Group and BP Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MyTech Group position performs unexpectedly, BP Plastics 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 BP Plastics will offset losses from the drop in BP Plastics' long position.| MyTech Group vs. Senheng New Retail | MyTech Group vs. Melewar Industrial Group | MyTech Group vs. Choo Bee Metal | MyTech Group vs. Silver Ridge Holdings |
| BP Plastics vs. Press Metal Bhd | BP Plastics vs. Central Industrial Corp | BP Plastics vs. Cosmos Technology International | BP Plastics vs. Binasat Communications 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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