Correlation Between Fraser Neave and TAS Offshore

Can any of the company-specific risk be diversified away by investing in both Fraser Neave and TAS Offshore 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 Fraser Neave and TAS Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Fraser Neave and TAS Offshore

0.61

Correlation Coefficient

Fraser Neave  TAS Offshore

Poor diversification

The 3 months correlation between Fraser and TAS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fraser Neave Holdings and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd and Fraser Neave 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 Fraser Neave Holdings are associated (or correlated) with TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Fraser Neave i.e., Fraser Neave and TAS Offshore go up and down completely randomly.

Pair Corralation between Fraser Neave and TAS Offshore

Assuming the 90 days trading horizon Fraser Neave Holdings is expected to under-perform the TAS Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Fraser Neave Holdings is 2.01 times less risky than TAS Offshore. The stock trades about -0.21 of its potential returns per unit of risk. The TAS Offshore Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  66.00  in TAS Offshore Bhd on October 22, 2024 and sell it today you would earn a total of  0.00  from holding TAS Offshore Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Fraser Neave Holdings  vs.  TAS Offshore Bhd

Fraser Neave Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fraser Neave Holdings 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.

TAS Offshore Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fraser Neave and TAS Offshore

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

The idea behind Fraser Neave Holdings and TAS Offshore 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.