Correlation Between Sapura Industrial and Pesona Metro
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Pesona Metro 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 Pesona Metro 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 Pesona Metro Holdings, you can compare the effects of market volatilities on Sapura Industrial and Pesona Metro 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 Pesona Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Pesona Metro.
Diversification Opportunities for Sapura Industrial and Pesona Metro
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sapura and Pesona is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Pesona Metro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesona Metro Holdings 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 Pesona Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesona Metro Holdings has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Pesona Metro go up and down completely randomly.
Pair Corralation between Sapura Industrial and Pesona Metro
Assuming the 90 days trading horizon Sapura Industrial is expected to generate 25.76 times less return on investment than Pesona Metro. But when comparing it to its historical volatility, Sapura Industrial Bhd is 1.03 times less risky than Pesona Metro. It trades about 0.01 of its potential returns per unit of risk. Pesona Metro Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Pesona Metro Holdings on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Pesona Metro Holdings or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Pesona Metro Holdings
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Pesona Metro Holdings |
Sapura Industrial and Pesona Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Pesona Metro
The main advantage of trading using opposite Sapura Industrial and Pesona Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Pesona Metro 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 Pesona Metro will offset losses from the drop in Pesona Metro'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 |
| Pesona Metro vs. Oriental Food Industries | Pesona Metro vs. Sports Toto Berhad | Pesona Metro vs. Eonmetall Group Bhd | Pesona Metro vs. Star Media 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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