Correlation Between Insas Bhd and Daya Materials

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

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

Diversification Opportunities for Insas Bhd and Daya Materials

0.43

Correlation Coefficient

Insas Bhd  Daya Materials

Very weak diversification

The 3 months correlation between Insas and Daya is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Insas Bhd 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 Insas Bhd are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Insas Bhd i.e., Insas Bhd and Daya Materials go up and down completely randomly.

Pair Corralation between Insas Bhd and Daya Materials

Assuming the 90 days trading horizon Insas Bhd is expected to generate 24.74 times less return on investment than Daya Materials. But when comparing it to its historical volatility, Insas Bhd is 6.88 times less risky than Daya Materials. It trades about 0.01 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Daya Materials Bhd on December 30, 2024 and sell it today you would lose (1.00) from holding Daya Materials Bhd or give up 9.09% of portfolio value over 90 days.

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

Insas Bhd  vs.  Daya Materials Bhd

Insas Bhd

Risk-Adjusted Performance

Very Weak

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

Daya Materials Bhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Daya Materials Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Daya Materials may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Insas Bhd and Daya Materials

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

The idea behind Insas Bhd and Daya Materials 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.