Correlation Between Bina Darulaman and Digistar Bhd

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

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

Diversification Opportunities for Bina Darulaman and Digistar Bhd

0.33

Correlation Coefficient

Bina Darulaman  Digistar Bhd

Weak diversification

The 3 months correlation between Bina and Digistar is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and Bina Darulaman 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 Bina Darulaman Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Digistar Bhd go up and down completely randomly.

Pair Corralation between Bina Darulaman and Digistar Bhd

Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to generate 0.36 times more return on investment than Digistar Bhd. However, Bina Darulaman Bhd is 2.78 times less risky than Digistar Bhd. It trades about -0.05 of its potential returns per unit of risk. Digistar Bhd is currently generating about -0.03 per unit of risk. If you would invest  28.00  in Bina Darulaman Bhd on November 29, 2024 and sell it today you would lose (2.00) from holding Bina Darulaman Bhd or give up 7.14% of portfolio value over 90 days.

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

Bina Darulaman Bhd  vs.  Digistar Bhd

Bina Darulaman Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bina Darulaman 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.

Digistar Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digistar 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 Bina Darulaman and Digistar Bhd

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

The idea behind Bina Darulaman Bhd and Digistar 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.