Correlation Between Bina Darulaman and Sports Toto

Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and Sports Toto 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 Sports Toto 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 Sports Toto Berhad, you can compare the effects of market volatilities on Bina Darulaman and Sports Toto 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 Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and Sports Toto.

Diversification Opportunities for Bina Darulaman and Sports Toto

0.28

Correlation Coefficient

Bina Darulaman  Sports Toto

Modest diversification

The 3 months correlation between Bina and Sports is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad 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 Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Sports Toto go up and down completely randomly.

Pair Corralation between Bina Darulaman and Sports Toto

Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to under-perform the Sports Toto. In addition to that, Bina Darulaman is 2.32 times more volatile than Sports Toto Berhad. It trades about -0.07 of its total potential returns per unit of risk. Sports Toto Berhad is currently generating about -0.11 per unit of volatility. If you would invest  157.00  in Sports Toto Berhad on September 4, 2024 and sell it today you would lose (12.00) from holding Sports Toto Berhad or give up 7.64% 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.  Sports Toto Berhad

Bina Darulaman Bhd

Risk-Adjusted Performance

0 of 100

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.

Sports Toto Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sports Toto Berhad 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 Sports Toto

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

The idea behind Bina Darulaman Bhd and Sports Toto Berhad 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.