Correlation Between ES Ceramics and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Berjaya Food 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 ES Ceramics and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Berjaya Food Bhd, you can compare the effects of market volatilities on ES Ceramics and Berjaya Food 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 ES Ceramics with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Berjaya Food.
Diversification Opportunities for ES Ceramics and Berjaya Food
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0100 and Berjaya is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Berjaya Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berjaya Food Bhd and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Berjaya Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berjaya Food Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and Berjaya Food go up and down completely randomly.
Pair Corralation between ES Ceramics and Berjaya Food
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Berjaya Food. But the stock apears to be less risky and, when comparing its historical volatility, ES Ceramics Technology is 1.15 times less risky than Berjaya Food. The stock trades about -0.14 of its potential returns per unit of risk. The Berjaya Food Bhd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Berjaya Food Bhd on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Berjaya Food Bhd or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Berjaya Food Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| Berjaya Food Bhd |
ES Ceramics and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Berjaya Food
The main advantage of trading using opposite ES Ceramics and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Berjaya Food 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 Berjaya Food will offset losses from the drop in Berjaya Food's long position.| ES Ceramics vs. Apollo Food Holdings | ES Ceramics vs. SSF Home Group | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Steel Hawk Berhad |
| Berjaya Food vs. Kawan Food Bhd | Berjaya Food vs. ES Ceramics Technology | Berjaya Food vs. EA Technique M | Berjaya Food vs. Globetronics Tech 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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