Correlation Between Nagacorp and Genting Singapore

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

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

Diversification Opportunities for Nagacorp and Genting Singapore

0.5

Correlation Coefficient

Nagacorp  Genting Singapore

Very weak diversification

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

Pair Corralation between Nagacorp and Genting Singapore

Assuming the 90 days horizon Nagacorp is expected to generate 0.93 times more return on investment than Genting Singapore. However, Nagacorp is 1.07 times less risky than Genting Singapore. It trades about 0.11 of its potential returns per unit of risk. Genting Singapore PLC is currently generating about -0.04 per unit of risk. 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

Nagacorp  vs.  Genting Singapore PLC

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.

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.

Pair Trading with Nagacorp and Genting Singapore

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

The idea behind Nagacorp and Genting Singapore PLC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..