Correlation Between Andover Bancorp and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Andover Bancorp 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 Andover Bancorp and Malayan Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andover Bancorp and Malayan Banking Berhad, you can compare the effects of market volatilities on Andover Bancorp 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 Andover Bancorp with a short position of Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andover Bancorp and Malayan Banking.
Diversification Opportunities for Andover Bancorp and Malayan Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Andover and Malayan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Andover Bancorp and Malayan Banking Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Berhad and Andover Bancorp 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 Andover Bancorp 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 Berhad has no effect on the direction of Andover Bancorp i.e., Andover Bancorp and Malayan Banking go up and down completely randomly.
Pair Corralation between Andover Bancorp and Malayan Banking
If you would invest 199.00 in Malayan Banking Berhad on October 22, 2024 and sell it today you would earn a total of 0.00 from holding Malayan Banking Berhad or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Andover Bancorp vs. Malayan Banking Berhad
Performance |
| Timeline |
| Andover Bancorp |
| Malayan Banking Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Andover Bancorp and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andover Bancorp and Malayan Banking
The main advantage of trading using opposite Andover Bancorp and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andover Bancorp 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.The idea behind Andover Bancorp and Malayan Banking Berhad pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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