Correlation Between Pentamaster Bhd and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Pentamaster Bhd and Al Aqar 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 Pentamaster Bhd and Al Aqar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentamaster Bhd and Al Aqar Healthcare, you can compare the effects of market volatilities on Pentamaster Bhd and Al Aqar 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 Pentamaster Bhd with a short position of Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentamaster Bhd and Al Aqar.
Diversification Opportunities for Pentamaster Bhd and Al Aqar
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pentamaster and 5116 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pentamaster Bhd and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare and Pentamaster Bhd 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 Pentamaster Bhd are associated (or correlated) with Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Pentamaster Bhd i.e., Pentamaster Bhd and Al Aqar go up and down completely randomly.
Pair Corralation between Pentamaster Bhd and Al Aqar
Assuming the 90 days trading horizon Pentamaster Bhd is expected to under-perform the Al Aqar. In addition to that, Pentamaster Bhd is 3.19 times more volatile than Al Aqar Healthcare. It trades about -0.04 of its total potential returns per unit of risk. Al Aqar Healthcare is currently generating about 0.04 per unit of volatility. If you would invest 127.00 in Al Aqar Healthcare on September 26, 2024 and sell it today you would earn a total of 6.00 from holding Al Aqar Healthcare or generate 4.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pentamaster Bhd vs. Al Aqar Healthcare
Performance |
Timeline |
Pentamaster Bhd |
Al Aqar Healthcare |
Pentamaster Bhd and Al Aqar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pentamaster Bhd and Al Aqar
The main advantage of trading using opposite Pentamaster Bhd and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentamaster Bhd position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.Pentamaster Bhd vs. Malayan Banking Bhd | Pentamaster Bhd vs. Public Bank Bhd | Pentamaster Bhd vs. Petronas Chemicals Group | Pentamaster Bhd vs. Tenaga Nasional Bhd |
Al Aqar vs. YTL Hospitality REIT | Al Aqar vs. OSK Holdings Bhd | Al Aqar vs. FARM FRESH BERHAD | Al Aqar vs. Pentamaster Bhd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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