Correlation Between Bonia Bhd and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Bonia Bhd and TAS Offshore 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 TAS Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonia Bhd and TAS Offshore Bhd, you can compare the effects of market volatilities on Bonia Bhd and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonia Bhd and TAS Offshore.
Diversification Opportunities for Bonia Bhd and TAS Offshore
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bonia and TAS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bonia Bhd and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Bonia Bhd i.e., Bonia Bhd and TAS Offshore go up and down completely randomly.
Pair Corralation between Bonia Bhd and TAS Offshore
Assuming the 90 days trading horizon Bonia Bhd is expected to under-perform the TAS Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Bonia Bhd is 1.14 times less risky than TAS Offshore. The stock trades about -0.2 of its potential returns per unit of risk. The TAS Offshore Bhd is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 65.00 in TAS Offshore Bhd on October 3, 2024 and sell it today you would lose (2.00) from holding TAS Offshore Bhd or give up 3.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Bonia Bhd vs. TAS Offshore Bhd
Performance |
Timeline |
Bonia Bhd |
TAS Offshore Bhd |
Bonia Bhd and TAS Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bonia Bhd and TAS Offshore
The main advantage of trading using opposite Bonia Bhd and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonia Bhd position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.Bonia Bhd vs. BP Plastics Holding | Bonia Bhd vs. Apex Healthcare Bhd | Bonia Bhd vs. MI Technovation Bhd | Bonia Bhd vs. Daya Materials Bhd |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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