Correlation Between Mah Sing and Amalgamated Industrial
Can any of the company-specific risk be diversified away by investing in both Mah Sing and Amalgamated Industrial 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 Amalgamated Industrial 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 Amalgamated Industrial Steel, you can compare the effects of market volatilities on Mah Sing and Amalgamated Industrial 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 Amalgamated Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mah Sing and Amalgamated Industrial.
Diversification Opportunities for Mah Sing and Amalgamated Industrial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mah and Amalgamated is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mah Sing Group and Amalgamated Industrial Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Industrial 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 Amalgamated Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Industrial has no effect on the direction of Mah Sing i.e., Mah Sing and Amalgamated Industrial go up and down completely randomly.
Pair Corralation between Mah Sing and Amalgamated Industrial
Assuming the 90 days trading horizon Mah Sing is expected to generate 1.56 times less return on investment than Amalgamated Industrial. But when comparing it to its historical volatility, Mah Sing Group is 2.36 times less risky than Amalgamated Industrial. It trades about 0.03 of its potential returns per unit of risk. Amalgamated Industrial Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Amalgamated Industrial Steel on September 2, 2024 and sell it today you would lose (1.00) from holding Amalgamated Industrial Steel or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mah Sing Group vs. Amalgamated Industrial Steel
Performance |
| Timeline |
| Mah Sing Group |
| Amalgamated Industrial |
Mah Sing and Amalgamated Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mah Sing and Amalgamated Industrial
The main advantage of trading using opposite Mah Sing and Amalgamated Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mah Sing position performs unexpectedly, Amalgamated Industrial 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 Amalgamated Industrial will offset losses from the drop in Amalgamated Industrial's long position.| Mah Sing vs. Digistar Bhd | Mah Sing vs. Minetech Resources Bhd | Mah Sing vs. Swift Haulage Bhd | Mah Sing vs. Bina Darulaman Bhd |
| Amalgamated Industrial vs. Digistar Bhd | Amalgamated Industrial vs. Minetech Resources Bhd | Amalgamated Industrial vs. Swift Haulage Bhd | Amalgamated Industrial vs. Bina Darulaman 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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