Correlation Between Malayan Banking and Rubberex M

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

Diversification Opportunities for Malayan Banking and Rubberex M

-0.76

Correlation Coefficient

Malayan Banking  Rubberex M

Pay attention - limited upside

The 3 months correlation between Malayan and Rubberex is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M 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 Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Malayan Banking i.e., Malayan Banking and Rubberex M go up and down completely randomly.

Pair Corralation between Malayan Banking and Rubberex M

Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.17 times more return on investment than Rubberex M. However, Malayan Banking Bhd is 5.87 times less risky than Rubberex M. It trades about 0.1 of its potential returns per unit of risk. Rubberex M is currently generating about -0.08 per unit of risk. If you would invest  981.00  in Malayan Banking Bhd on December 26, 2024 and sell it today you would earn a total of  41.00  from holding Malayan Banking Bhd or generate 4.18% return on investment over 90 days.

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

Malayan Banking Bhd  vs.  Rubberex M

Malayan Banking Bhd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Malayan Banking Bhd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. 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.

Rubberex M

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rubberex M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Malayan Banking and Rubberex M

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

The idea behind Malayan Banking Bhd and Rubberex M 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.