Correlation Between Sapura Industrial and Star Media
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Star Media 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 Star Media 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 Star Media Group, you can compare the effects of market volatilities on Sapura Industrial and Star Media 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 Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Star Media.
Diversification Opportunities for Sapura Industrial and Star Media
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and Star is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media Group 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 Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Star Media go up and down completely randomly.
Pair Corralation between Sapura Industrial and Star Media
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 0.48 times more return on investment than Star Media. However, Sapura Industrial Bhd is 2.09 times less risky than Star Media. It trades about 0.06 of its potential returns per unit of risk. Star Media Group is currently generating about -0.1 per unit of risk. If you would invest 83.00 in Sapura Industrial Bhd on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Sapura Industrial Bhd or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Star Media Group
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Star Media Group |
Sapura Industrial and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Star Media
The main advantage of trading using opposite Sapura Industrial and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media's long position.| Sapura Industrial vs. Eversafe Rubber Bhd | Sapura Industrial vs. Digistar Bhd | Sapura Industrial vs. Minetech Resources Bhd | Sapura Industrial vs. OpenSys M Bhd |
| Star Media vs. Press Metal Bhd | Star Media vs. Riverview Rubber Estates | Star Media vs. Sapura Industrial Bhd | Star Media vs. CB Industrial Product |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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