Correlation Between MI Technovation and Bonia Bhd

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

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

Diversification Opportunities for MI Technovation and Bonia Bhd

-0.87

Correlation Coefficient

MI Technovation  Bonia Bhd

Pay attention - limited upside

The 3 months correlation between 5286 and Bonia is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation Bhd and Bonia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonia Bhd and MI Technovation 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 MI Technovation Bhd are associated (or correlated) with Bonia Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonia Bhd has no effect on the direction of MI Technovation i.e., MI Technovation and Bonia Bhd go up and down completely randomly.

Pair Corralation between MI Technovation and Bonia Bhd

Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 1.85 times more return on investment than Bonia Bhd. However, MI Technovation is 1.85 times more volatile than Bonia Bhd. It trades about 0.05 of its potential returns per unit of risk. Bonia Bhd is currently generating about -0.05 per unit of risk. If you would invest  164.00  in MI Technovation Bhd on October 5, 2024 and sell it today you would earn a total of  62.00  from holding MI Technovation Bhd or generate 37.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.34%
Values	Daily Returns

MI Technovation Bhd  vs.  Bonia Bhd

MI Technovation Bhd

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MI Technovation Bhd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, MI Technovation disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bonia Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonia Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with MI Technovation and Bonia Bhd

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

The idea behind MI Technovation Bhd and Bonia 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.