Correlation Between Sapura Industrial and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and ES Ceramics 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 ES Ceramics 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 ES Ceramics Technology, you can compare the effects of market volatilities on Sapura Industrial and ES Ceramics 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 ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and ES Ceramics.
Diversification Opportunities for Sapura Industrial and ES Ceramics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sapura and 0100 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology 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 ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and ES Ceramics go up and down completely randomly.
Pair Corralation between Sapura Industrial and ES Ceramics
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 0.47 times more return on investment than ES Ceramics. However, Sapura Industrial Bhd is 2.14 times less risky than ES Ceramics. It trades about -0.07 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.14 per unit of risk. If you would invest 89.00 in Sapura Industrial Bhd on November 28, 2024 and sell it today you would lose (3.00) from holding Sapura Industrial Bhd or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. ES Ceramics Technology
Performance |
| Timeline |
| Sapura Industrial Bhd |
| ES Ceramics Technology |
Sapura Industrial and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and ES Ceramics
The main advantage of trading using opposite Sapura Industrial and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Sapura Industrial vs. Eversafe Rubber Bhd | Sapura Industrial vs. Kossan Rubber Industries | Sapura Industrial vs. Sunway Construction Group | Sapura Industrial vs. YX Precious Metals |
| ES Ceramics vs. Press Metal Bhd | ES Ceramics vs. Carlsberg Brewery Malaysia | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Ho Hup Construction |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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