Correlation Between Bonia Bhd and Silver Ridge

Can any of the company-specific risk be diversified away by investing in both Bonia Bhd and Silver Ridge 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 Bonia Bhd and Silver Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Bonia Bhd and Silver Ridge

0.55

Correlation Coefficient

Bonia Bhd  Silver Ridge

Very weak diversification

The 3 months correlation between Bonia and Silver is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bonia Bhd and Silver Ridge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Ridge Holdings and Bonia 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 Bonia Bhd are associated (or correlated) with Silver Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Ridge Holdings has no effect on the direction of Bonia Bhd i.e., Bonia Bhd and Silver Ridge go up and down completely randomly.

Pair Corralation between Bonia Bhd and Silver Ridge

Assuming the 90 days trading horizon Bonia Bhd is expected to under-perform the Silver Ridge. But the stock apears to be less risky and, when comparing its historical volatility, Bonia Bhd is 3.43 times less risky than Silver Ridge. The stock trades about -0.08 of its potential returns per unit of risk. The Silver Ridge Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Silver Ridge Holdings on October 25, 2024 and sell it today you would earn a total of  33.00  from holding Silver Ridge Holdings or generate 157.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Bonia Bhd  vs.  Silver Ridge Holdings

Bonia Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonia 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Silver Ridge Holdings

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Ridge Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Silver Ridge disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bonia Bhd and Silver Ridge

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

The idea behind Bonia Bhd and Silver Ridge Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.