Correlation Between Malayan Banking and Tenaga Nasional

Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Tenaga Nasional 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 Tenaga Nasional 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 Tenaga Nasional Bhd, you can compare the effects of market volatilities on Malayan Banking and Tenaga Nasional 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 Tenaga Nasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Tenaga Nasional.

Diversification Opportunities for Malayan Banking and Tenaga Nasional

0.0

Correlation Coefficient

Malayan Banking  Tenaga Nasional

Pay attention - limited upside

The 3 months correlation between Malayan and Tenaga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Tenaga Nasional Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaga Nasional Bhd 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 Tenaga Nasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaga Nasional Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Tenaga Nasional go up and down completely randomly.

Pair Corralation between Malayan Banking and Tenaga Nasional

If you would invest  0.00  in Tenaga Nasional Bhd on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Tenaga Nasional Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Malayan Banking Bhd  vs.  Tenaga Nasional Bhd

Malayan Banking Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malayan Banking Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Malayan Banking is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Tenaga Nasional Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tenaga Nasional Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Tenaga Nasional is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Malayan Banking and Tenaga Nasional

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

The idea behind Malayan Banking Bhd and Tenaga Nasional 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..