Correlation Between Sapura Industrial and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Al Aqar 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 Al Aqar 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 Al Aqar Healthcare, you can compare the effects of market volatilities on Sapura Industrial and Al Aqar 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 Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Al Aqar.
Diversification Opportunities for Sapura Industrial and Al Aqar
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and 5116 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare 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 Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Al Aqar go up and down completely randomly.
Pair Corralation between Sapura Industrial and Al Aqar
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 1.95 times more return on investment than Al Aqar. However, Sapura Industrial is 1.95 times more volatile than Al Aqar Healthcare. It trades about 0.06 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about 0.0 per unit of risk. If you would invest 81.00 in Sapura Industrial Bhd on November 2, 2024 and sell it today you would earn a total of 8.00 from holding Sapura Industrial Bhd or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Al Aqar Healthcare
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Al Aqar Healthcare |
Sapura Industrial and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Al Aqar
The main advantage of trading using opposite Sapura Industrial and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.| Sapura Industrial vs. Eversafe Rubber Bhd | Sapura Industrial vs. Minetech Resources Bhd | Sapura Industrial vs. AirAsia X Bhd | Sapura Industrial vs. Tambun Indah Land |
| Al Aqar vs. Awanbiru Technology Bhd | Al Aqar vs. Public Bank Bhd | Al Aqar vs. Malayan Banking Bhd | Al Aqar vs. Bank Islam Malaysia |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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