Correlation Between MyTech Group and Senheng New

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

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

Diversification Opportunities for MyTech Group and Senheng New

0.29

Correlation Coefficient

MyTech Group  Senheng New

Modest diversification

The 3 months correlation between MyTech and Senheng is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MyTech Group Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail and MyTech 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 MyTech Group Bhd are associated (or correlated) with Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of MyTech Group i.e., MyTech Group and Senheng New go up and down completely randomly.

Pair Corralation between MyTech Group and Senheng New

Assuming the 90 days trading horizon MyTech Group Bhd is expected to under-perform the Senheng New. In addition to that, MyTech Group is 1.46 times more volatile than Senheng New Retail. It trades about -0.07 of its total potential returns per unit of risk. Senheng New Retail is currently generating about -0.07 per unit of volatility. If you would invest  28.00  in Senheng New Retail on September 1, 2024 and sell it today you would lose (3.00) from holding Senheng New Retail or give up 10.71% of portfolio value over 90 days.

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

MyTech Group Bhd  vs.  Senheng New Retail

MyTech Group Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MyTech 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Senheng New Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senheng New Retail 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 MyTech Group and Senheng New

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

The idea behind MyTech Group Bhd and Senheng New Retail 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.