Correlation Between Malayan Banking and Asia Media

Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Asia Media 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 Malayan Banking and Asia Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Malayan Banking Bhd and Asia Media Group, you can compare the effects of market volatilities on Malayan Banking and Asia Media 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 Malayan Banking with a short position of Asia Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Asia Media.

Diversification Opportunities for Malayan Banking and Asia Media

0.17

Correlation Coefficient

Malayan Banking  Asia Media

Average diversification

The 3 months correlation between Malayan and Asia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Asia Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Media Group and Malayan Banking 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 Malayan Banking Bhd are associated (or correlated) with Asia Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Media Group has no effect on the direction of Malayan Banking i.e., Malayan Banking and Asia Media go up and down completely randomly.

Pair Corralation between Malayan Banking and Asia Media

Assuming the 90 days trading horizon Malayan Banking is expected to generate 8.02 times less return on investment than Asia Media. But when comparing it to its historical volatility, Malayan Banking Bhd is 14.28 times less risky than Asia Media. It trades about 0.16 of its potential returns per unit of risk. Asia Media Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Asia Media Group on December 1, 2024 and sell it today you would earn a total of  2.00  from holding Asia Media Group or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Malayan Banking Bhd  vs.  Asia Media Group

Malayan Banking Bhd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Malayan Banking Bhd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Malayan Banking may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Asia Media Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Media Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Asia Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Malayan Banking and Asia Media

The main advantage of trading using opposite Malayan Banking and Asia Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Asia Media 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 Asia Media will offset losses from the drop in Asia Media's long position.

The idea behind Malayan Banking Bhd and Asia Media Group 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.