Correlation Between Axiata Group and TIME Dotcom

Can any of the company-specific risk be diversified away by investing in both Axiata Group and TIME Dotcom 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 Axiata Group and TIME Dotcom into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Axiata Group and TIME Dotcom

-0.51

Correlation Coefficient

Axiata Group  TIME Dotcom

Excellent diversification

The 3 months correlation between Axiata and TIME is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Axiata Group Bhd and TIME Dotcom Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIME Dotcom Bhd and Axiata Group 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 Axiata Group Bhd are associated (or correlated) with TIME Dotcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIME Dotcom Bhd has no effect on the direction of Axiata Group i.e., Axiata Group and TIME Dotcom go up and down completely randomly.

Pair Corralation between Axiata Group and TIME Dotcom

Assuming the 90 days trading horizon Axiata Group Bhd is expected to under-perform the TIME Dotcom. In addition to that, Axiata Group is 1.23 times more volatile than TIME Dotcom Bhd. It trades about -0.16 of its total potential returns per unit of risk. TIME Dotcom Bhd is currently generating about 0.1 per unit of volatility. If you would invest  480.00  in TIME Dotcom Bhd on December 4, 2024 and sell it today you would earn a total of  37.00  from holding TIME Dotcom Bhd or generate 7.71% return on investment over 90 days.

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

Axiata Group Bhd  vs.  TIME Dotcom Bhd

Axiata Group Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axiata Group 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.

TIME Dotcom Bhd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TIME Dotcom Bhd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, TIME Dotcom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Axiata Group and TIME Dotcom

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

The idea behind Axiata Group Bhd and TIME Dotcom 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.