Correlation Between Mah Sing and Senheng New
Can any of the company-specific risk be diversified away by investing in both Mah Sing and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Mah Sing and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mah Sing and Senheng New.
Diversification Opportunities for Mah Sing and Senheng New
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mah and Senheng is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mah Sing Group and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Mah Sing i.e., Mah Sing and Senheng New go up and down completely randomly.
Pair Corralation between Mah Sing and Senheng New
Assuming the 90 days trading horizon Mah Sing Group is expected to under-perform the Senheng New. But the stock apears to be less risky and, when comparing its historical volatility, Mah Sing Group is 1.44 times less risky than Senheng New. The stock trades about -0.2 of its potential returns per unit of risk. The Senheng New Retail is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Senheng New Retail on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Senheng New Retail or generate 4.17% 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. Senheng New Retail
Performance |
| Timeline |
| Mah Sing Group |
| Senheng New Retail |
Mah Sing and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mah Sing and Senheng New
The main advantage of trading using opposite Mah Sing and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mah Sing position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Mah Sing vs. Eco World Develop | Mah Sing vs. Fitters Diversified Bhd | Mah Sing vs. Amalgamated Industrial Steel | Mah Sing vs. Minetech Resources Bhd |
| Senheng New vs. Mr D I | Senheng New vs. Radiant Globaltech Bhd | Senheng New vs. Minetech Resources Bhd | Senheng New vs. Swift Haulage 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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