Correlation Between Tenaga Nasional and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Tenaga Nasional and ES Ceramics 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 Tenaga Nasional and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaga Nasional Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on Tenaga Nasional and ES Ceramics 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 Tenaga Nasional with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaga Nasional and ES Ceramics.
Diversification Opportunities for Tenaga Nasional and ES Ceramics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tenaga and 0100 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tenaga Nasional Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Tenaga Nasional 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 Tenaga Nasional Bhd are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Tenaga Nasional i.e., Tenaga Nasional and ES Ceramics go up and down completely randomly.
Pair Corralation between Tenaga Nasional and ES Ceramics
Assuming the 90 days trading horizon Tenaga Nasional Bhd is expected to generate 0.43 times more return on investment than ES Ceramics. However, Tenaga Nasional Bhd is 2.33 times less risky than ES Ceramics. It trades about -0.04 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.06 per unit of risk. If you would invest 1,400 in Tenaga Nasional Bhd on October 23, 2024 and sell it today you would lose (22.00) from holding Tenaga Nasional Bhd or give up 1.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tenaga Nasional Bhd vs. ES Ceramics Technology
Performance |
Timeline |
Tenaga Nasional Bhd |
ES Ceramics Technology |
Tenaga Nasional and ES Ceramics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tenaga Nasional and ES Ceramics
The main advantage of trading using opposite Tenaga Nasional and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaga Nasional position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.Tenaga Nasional vs. Binasat Communications Bhd | Tenaga Nasional vs. Sunway Construction Group | Tenaga Nasional vs. YTL Hospitality REIT | Tenaga Nasional vs. Silver Ridge Holdings |
ES Ceramics vs. YX Precious Metals | ES Ceramics vs. Melewar Industrial Group | ES Ceramics vs. Mercury Industries Bhd | ES Ceramics vs. Star Media Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |