Correlation Between Bina Darulaman and Eco World

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

Diversification Opportunities for Bina Darulaman and Eco World

0.13

Correlation Coefficient

Bina Darulaman  Eco World

Average diversification

The 3 months correlation between Bina and Eco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and Eco World Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco World Develop 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 Eco World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco World Develop has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and Eco World go up and down completely randomly.

Pair Corralation between Bina Darulaman and Eco World

Assuming the 90 days trading horizon Bina Darulaman Bhd is expected to under-perform the Eco World. In addition to that, Bina Darulaman is 1.19 times more volatile than Eco World Develop. It trades about -0.08 of its total potential returns per unit of risk. Eco World Develop is currently generating about -0.03 per unit of volatility. If you would invest  211.00  in Eco World Develop on December 30, 2024 and sell it today you would lose (14.00) from holding Eco World Develop or give up 6.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bina Darulaman Bhd  vs.  Eco World Develop

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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Eco World Develop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eco World Develop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Eco World 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 Bina Darulaman and Eco World

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

The idea behind Bina Darulaman Bhd and Eco World Develop 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.