Correlation Between Brite Tech and YTL Hospitality
Can any of the company-specific risk be diversified away by investing in both Brite Tech and YTL Hospitality 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 Brite Tech and YTL Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brite Tech Bhd and YTL Hospitality REIT, you can compare the effects of market volatilities on Brite Tech and YTL Hospitality 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 Brite Tech with a short position of YTL Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brite Tech and YTL Hospitality.
Diversification Opportunities for Brite Tech and YTL Hospitality
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brite and YTL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Brite Tech Bhd and YTL Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Hospitality REIT and Brite Tech 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 Brite Tech Bhd are associated (or correlated) with YTL Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Hospitality REIT has no effect on the direction of Brite Tech i.e., Brite Tech and YTL Hospitality go up and down completely randomly.
Pair Corralation between Brite Tech and YTL Hospitality
Assuming the 90 days trading horizon Brite Tech Bhd is expected to generate 3.22 times more return on investment than YTL Hospitality. However, Brite Tech is 3.22 times more volatile than YTL Hospitality REIT. It trades about 0.03 of its potential returns per unit of risk. YTL Hospitality REIT is currently generating about 0.1 per unit of risk. If you would invest 27.00 in Brite Tech Bhd on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Brite Tech Bhd or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brite Tech Bhd vs. YTL Hospitality REIT
Performance |
| Timeline |
| Brite Tech Bhd |
| YTL Hospitality REIT |
Brite Tech and YTL Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brite Tech and YTL Hospitality
The main advantage of trading using opposite Brite Tech and YTL Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brite Tech position performs unexpectedly, YTL Hospitality 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 YTL Hospitality will offset losses from the drop in YTL Hospitality's long position.| Brite Tech vs. Choo Bee Metal | Brite Tech vs. KPJ Healthcare Bhd | Brite Tech vs. Computer Forms Bhd | Brite Tech vs. Cosmos Technology International |
| YTL Hospitality vs. Digistar Bhd | YTL Hospitality vs. Minetech Resources Bhd | YTL Hospitality vs. OpenSys M Bhd | YTL Hospitality vs. Insas Bhd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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