Correlation Between Sapura Industrial and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Sports Toto 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 Sports Toto 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 Sports Toto Berhad, you can compare the effects of market volatilities on Sapura Industrial and Sports Toto 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 Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Sports Toto.
Diversification Opportunities for Sapura Industrial and Sports Toto
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sapura and Sports is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad 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 Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Sports Toto go up and down completely randomly.
Pair Corralation between Sapura Industrial and Sports Toto
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 1.04 times more return on investment than Sports Toto. However, Sapura Industrial is 1.04 times more volatile than Sports Toto Berhad. It trades about 0.11 of its potential returns per unit of risk. Sports Toto Berhad is currently generating about -0.06 per unit of risk. If you would invest 82.00 in Sapura Industrial Bhd on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Sapura Industrial Bhd or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Sports Toto Berhad
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Sports Toto Berhad |
Sapura Industrial and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Sports Toto
The main advantage of trading using opposite Sapura Industrial and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Sapura Industrial vs. Eversafe Rubber Bhd | Sapura Industrial vs. Al Aqar Healthcare | Sapura Industrial vs. PMB Technology Bhd | Sapura Industrial vs. Digistar Bhd |
| Sports Toto vs. Impiana Hotels Bhd | Sports Toto vs. Al Aqar Healthcare | Sports Toto vs. PMB Technology Bhd | Sports Toto vs. Digistar 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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