Correlation Between Sapura Industrial and YX Precious
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on Sapura Industrial and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and YX Precious.
Diversification Opportunities for Sapura Industrial and YX Precious
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sapura and 0250 is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and YX Precious go up and down completely randomly.
Pair Corralation between Sapura Industrial and YX Precious
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 1.51 times more return on investment than YX Precious. However, Sapura Industrial is 1.51 times more volatile than YX Precious Metals. It trades about 0.03 of its potential returns per unit of risk. YX Precious Metals is currently generating about 0.01 per unit of risk. If you would invest 76.00 in Sapura Industrial Bhd on October 16, 2024 and sell it today you would earn a total of 14.00 from holding Sapura Industrial Bhd or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. YX Precious Metals
Performance |
| Timeline |
| Sapura Industrial Bhd |
| YX Precious Metals |
Sapura Industrial and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and YX Precious
The main advantage of trading using opposite Sapura Industrial and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| Sapura Industrial vs. Petronas Chemicals Group | Sapura Industrial vs. British American Tobacco | Sapura Industrial vs. Media Prima Bhd | Sapura Industrial vs. Resintech Bhd |
| YX Precious vs. Star Media Group | YX Precious vs. Senheng New Retail | YX Precious vs. Tex Cycle Technology | YX Precious vs. PESTECH International 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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