Correlation Between Sungei Bagan and Uwc Bhd

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

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

Diversification Opportunities for Sungei Bagan and Uwc Bhd

-0.82

Correlation Coefficient

Sungei Bagan  Uwc Bhd

Pay attention - limited upside

The 3 months correlation between Sungei and Uwc is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and Uwc Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwc Bhd and Sungei Bagan 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 Sungei Bagan Rubber are associated (or correlated) with Uwc Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwc Bhd has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and Uwc Bhd go up and down completely randomly.

Pair Corralation between Sungei Bagan and Uwc Bhd

Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the Uwc Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 3.39 times less risky than Uwc Bhd. The stock trades about -0.25 of its potential returns per unit of risk. The Uwc Bhd is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Uwc Bhd on October 6, 2024 and sell it today you would earn a total of  29.00  from holding Uwc Bhd or generate 10.55% return on investment over 90 days.

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

Sungei Bagan Rubber  vs.  Uwc Bhd

Sungei Bagan Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sungei Bagan Rubber 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Uwc Bhd

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Uwc Bhd are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Uwc Bhd disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sungei Bagan and Uwc Bhd

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

The idea behind Sungei Bagan Rubber and Uwc 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 CEOs Directory module to screen CEOs from public companies around the world.