Correlation Between Mah Sing and Public Bank
Can any of the company-specific risk be diversified away by investing in both Mah Sing and Public Bank 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 Mah Sing and Public Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mah Sing Group and Public Bank Bhd, you can compare the effects of market volatilities on Mah Sing and Public Bank 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 Mah Sing with a short position of Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mah Sing and Public Bank.
Diversification Opportunities for Mah Sing and Public Bank
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mah and Public is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mah Sing Group and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank Bhd and Mah Sing 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 Mah Sing Group are associated (or correlated) with Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of Mah Sing i.e., Mah Sing and Public Bank go up and down completely randomly.
Pair Corralation between Mah Sing and Public Bank
Assuming the 90 days trading horizon Mah Sing Group is expected to generate 2.57 times more return on investment than Public Bank. However, Mah Sing is 2.57 times more volatile than Public Bank Bhd. It trades about 0.13 of its potential returns per unit of risk. Public Bank Bhd is currently generating about 0.04 per unit of risk. If you would invest 79.00 in Mah Sing Group on August 24, 2024 and sell it today you would earn a total of 92.00 from holding Mah Sing Group or generate 116.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mah Sing Group vs. Public Bank Bhd
Performance |
| Timeline |
| Mah Sing Group |
| Public Bank Bhd |
Mah Sing and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mah Sing and Public Bank
The main advantage of trading using opposite Mah Sing and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mah Sing position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's long position.| Mah Sing vs. Awanbiru Technology Bhd | Mah Sing vs. CPE Technology Berhad | Mah Sing vs. Sapura Industrial Bhd | Mah Sing vs. PIE Industrial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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