Correlation Between Genting Singapore and Nagacorp

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

By analyzing existing cross correlation between Genting Singapore PLC and Nagacorp, you can compare the effects of market volatilities on Genting Singapore and Nagacorp 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 Genting Singapore with a short position of Nagacorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genting Singapore and Nagacorp.

Diversification Opportunities for Genting Singapore and Nagacorp

0.5

Correlation Coefficient

Genting Singapore  Nagacorp

Very weak diversification

The 3 months correlation between Genting and Nagacorp is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Genting Singapore PLC and Nagacorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nagacorp and Genting Singapore 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 Genting Singapore PLC are associated (or correlated) with Nagacorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nagacorp has no effect on the direction of Genting Singapore i.e., Genting Singapore and Nagacorp go up and down completely randomly.

Pair Corralation between Genting Singapore and Nagacorp

Assuming the 90 days horizon Genting Singapore PLC is expected to under-perform the Nagacorp. In addition to that, Genting Singapore is 1.07 times more volatile than Nagacorp. It trades about -0.04 of its total potential returns per unit of risk. Nagacorp is currently generating about 0.11 per unit of volatility. If you would invest  35.00  in Nagacorp on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Nagacorp or generate 17.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.27%
Values	Daily Returns

Genting Singapore PLC  vs.  Nagacorp

Genting Singapore PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genting Singapore PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nagacorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nagacorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nagacorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genting Singapore and Nagacorp

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

The idea behind Genting Singapore PLC and Nagacorp 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.