Correlation Between Sports Toto and Supermax Bhd

Can any of the company-specific risk be diversified away by investing in both Sports Toto and Supermax 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 Sports Toto and Supermax Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sports Toto Berhad and Supermax Bhd, you can compare the effects of market volatilities on Sports Toto and Supermax 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 Sports Toto with a short position of Supermax Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Toto and Supermax Bhd.

Diversification Opportunities for Sports Toto and Supermax Bhd

-0.07

Correlation Coefficient

Sports Toto  Supermax Bhd

Good diversification

The 3 months correlation between Sports and Supermax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sports Toto Berhad and Supermax Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermax Bhd and Sports Toto 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 Sports Toto Berhad are associated (or correlated) with Supermax Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermax Bhd has no effect on the direction of Sports Toto i.e., Sports Toto and Supermax Bhd go up and down completely randomly.

Pair Corralation between Sports Toto and Supermax Bhd

Assuming the 90 days trading horizon Sports Toto is expected to generate 7.5 times less return on investment than Supermax Bhd. But when comparing it to its historical volatility, Sports Toto Berhad is 2.6 times less risky than Supermax Bhd. It trades about 0.06 of its potential returns per unit of risk. Supermax Bhd is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Supermax Bhd on October 25, 2024 and sell it today you would earn a total of  33.00  from holding Supermax Bhd or generate 40.74% return on investment over 90 days.

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

Sports Toto Berhad  vs.  Supermax Bhd

Sports Toto Berhad

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sports Toto Berhad are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Sports Toto is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Supermax Bhd

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supermax Bhd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Supermax Bhd disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sports Toto and Supermax Bhd

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

The idea behind Sports Toto Berhad and Supermax 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.