Correlation Between Nasdaq and Padini Holdings
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Padini Holdings 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 Nasdaq and Padini Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Padini Holdings Bhd, you can compare the effects of market volatilities on Nasdaq and Padini Holdings 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 Nasdaq with a short position of Padini Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Padini Holdings.
Diversification Opportunities for Nasdaq and Padini Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq and Padini is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Padini Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Padini Holdings Bhd and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Padini Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Padini Holdings Bhd has no effect on the direction of Nasdaq i.e., Nasdaq and Padini Holdings go up and down completely randomly.
Pair Corralation between Nasdaq and Padini Holdings
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.95 times more return on investment than Padini Holdings. However, Nasdaq Inc is 1.05 times less risky than Padini Holdings. It trades about 0.09 of its potential returns per unit of risk. Padini Holdings Bhd is currently generating about -0.41 per unit of risk. If you would invest 7,738 in Nasdaq Inc on October 20, 2024 and sell it today you would earn a total of 145.00 from holding Nasdaq Inc or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nasdaq Inc vs. Padini Holdings Bhd
Performance |
| Timeline |
| Nasdaq Inc |
| Padini Holdings Bhd |
Nasdaq and Padini Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Padini Holdings
The main advantage of trading using opposite Nasdaq and Padini Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Padini Holdings 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 Padini Holdings will offset losses from the drop in Padini Holdings' long position.The idea behind Nasdaq Inc and Padini Holdings Bhd 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.| Padini Holdings vs. Malayan Banking Bhd | Padini Holdings vs. Public Bank Bhd | Padini Holdings vs. Petronas Chemicals Group | Padini Holdings vs. Tenaga Nasional 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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