Correlation Between Sapura Industrial and Daya Materials
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Daya Materials 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 Sapura Industrial and Daya Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Industrial Bhd and Daya Materials Bhd, you can compare the effects of market volatilities on Sapura Industrial and Daya Materials 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 Sapura Industrial with a short position of Daya Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Daya Materials.
Diversification Opportunities for Sapura Industrial and Daya Materials
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and Daya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Sapura Industrial 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 Sapura Industrial Bhd are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Daya Materials go up and down completely randomly.
Pair Corralation between Sapura Industrial and Daya Materials
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 1.04 times more return on investment than Daya Materials. However, Sapura Industrial is 1.04 times more volatile than Daya Materials Bhd. It trades about 0.02 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about -0.02 per unit of risk. If you would invest 84.00 in Sapura Industrial Bhd on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Sapura Industrial Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Daya Materials Bhd
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Daya Materials Bhd |
Sapura Industrial and Daya Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Daya Materials
The main advantage of trading using opposite Sapura Industrial and Daya Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Daya Materials 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 Daya Materials will offset losses from the drop in Daya Materials' long position.| Sapura Industrial vs. Digistar Bhd | Sapura Industrial vs. Minetech Resources Bhd | Sapura Industrial vs. Swift Haulage Bhd | Sapura Industrial vs. Bina Darulaman Bhd |
| Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd | Daya Materials vs. Swift Haulage 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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