Correlation Between Stellar and Mesiniaga Bhd
Can any of the company-specific risk be diversified away by investing in both Stellar and Mesiniaga Bhd 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 Stellar and Mesiniaga Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Mesiniaga Bhd, you can compare the effects of market volatilities on Stellar and Mesiniaga Bhd 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 Stellar with a short position of Mesiniaga Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Mesiniaga Bhd.
Diversification Opportunities for Stellar and Mesiniaga Bhd
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stellar and Mesiniaga is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Mesiniaga Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesiniaga Bhd and Stellar 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 Stellar are associated (or correlated) with Mesiniaga Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesiniaga Bhd has no effect on the direction of Stellar i.e., Stellar and Mesiniaga Bhd go up and down completely randomly.
Pair Corralation between Stellar and Mesiniaga Bhd
Assuming the 90 days trading horizon Stellar is expected to generate 3.59 times more return on investment than Mesiniaga Bhd. However, Stellar is 3.59 times more volatile than Mesiniaga Bhd. It trades about 0.14 of its potential returns per unit of risk. Mesiniaga Bhd is currently generating about 0.03 per unit of risk. If you would invest 11.00 in Stellar on October 18, 2024 and sell it today you would earn a total of 37.00 from holding Stellar or generate 336.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.58% |
| Values | Daily Returns |
Stellar vs. Mesiniaga Bhd
Performance |
| Timeline |
| Stellar |
| Mesiniaga Bhd |
Stellar and Mesiniaga Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Mesiniaga Bhd
The main advantage of trading using opposite Stellar and Mesiniaga Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Mesiniaga Bhd 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 Mesiniaga Bhd will offset losses from the drop in Mesiniaga Bhd's long position.The idea behind Stellar and Mesiniaga 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.| Mesiniaga Bhd vs. Malayan Banking Bhd | Mesiniaga Bhd vs. Public Bank Bhd | Mesiniaga Bhd vs. Petronas Chemicals Group | Mesiniaga Bhd 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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