Correlation Between Sapura Industrial and Awanbiru Technology
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Awanbiru Technology 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 Awanbiru Technology 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 Awanbiru Technology Bhd, you can compare the effects of market volatilities on Sapura Industrial and Awanbiru Technology 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 Awanbiru Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Awanbiru Technology.
Diversification Opportunities for Sapura Industrial and Awanbiru Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and Awanbiru is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Awanbiru Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awanbiru Technology 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 Awanbiru Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awanbiru Technology Bhd has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Awanbiru Technology go up and down completely randomly.
Pair Corralation between Sapura Industrial and Awanbiru Technology
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 0.38 times more return on investment than Awanbiru Technology. However, Sapura Industrial Bhd is 2.65 times less risky than Awanbiru Technology. It trades about 0.15 of its potential returns per unit of risk. Awanbiru Technology Bhd is currently generating about -0.12 per unit of risk. If you would invest 82.00 in Sapura Industrial Bhd on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Sapura Industrial Bhd or generate 3.66% 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. Awanbiru Technology Bhd
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Awanbiru Technology Bhd |
Sapura Industrial and Awanbiru Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Awanbiru Technology
The main advantage of trading using opposite Sapura Industrial and Awanbiru Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Awanbiru Technology 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 Awanbiru Technology will offset losses from the drop in Awanbiru Technology's long position.| Sapura Industrial vs. Lyc Healthcare Bhd | Sapura Industrial vs. Apex Healthcare Bhd | Sapura Industrial vs. TAS Offshore Bhd | Sapura Industrial vs. Resintech Bhd |
| Awanbiru Technology vs. IHH Healthcare Bhd | Awanbiru Technology vs. Diversified Gateway Solutions | Awanbiru Technology vs. Datasonic Group Bhd | Awanbiru Technology vs. Sunway Construction Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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