Correlation Between Boustead Heavy and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Boustead Heavy and Malayan Banking 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 Boustead Heavy and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boustead Heavy Industries and Malayan Banking Bhd, you can compare the effects of market volatilities on Boustead Heavy and Malayan Banking 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 Boustead Heavy with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boustead Heavy and Malayan Banking.
Diversification Opportunities for Boustead Heavy and Malayan Banking
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boustead and Malayan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Boustead Heavy Industries and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd and Boustead Heavy 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 Boustead Heavy Industries are associated (or correlated) with Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Boustead Heavy i.e., Boustead Heavy and Malayan Banking go up and down completely randomly.
Pair Corralation between Boustead Heavy and Malayan Banking
Assuming the 90 days trading horizon Boustead Heavy Industries is expected to generate 12.82 times more return on investment than Malayan Banking. However, Boustead Heavy is 12.82 times more volatile than Malayan Banking Bhd. It trades about 0.21 of its potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.19 per unit of risk. If you would invest 28.00 in Boustead Heavy Industries on September 4, 2024 and sell it today you would earn a total of 13.00 from holding Boustead Heavy Industries or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boustead Heavy Industries vs. Malayan Banking Bhd
Performance |
| Timeline |
| Boustead Heavy Industries |
| Malayan Banking Bhd |
Boustead Heavy and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boustead Heavy and Malayan Banking
The main advantage of trading using opposite Boustead Heavy and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boustead Heavy position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| Boustead Heavy vs. Media Prima Bhd | Boustead Heavy vs. Shangri La Hotels | Boustead Heavy vs. YTL Hospitality REIT | Boustead Heavy vs. Press Metal Bhd |
| Malayan Banking vs. Awanbiru Technology Bhd | Malayan Banking vs. MI Technovation Bhd | Malayan Banking vs. Cloudpoint Technology Berhad | Malayan Banking vs. Media Prima 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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