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
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0100 and Berjaya is -0.11. 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 generate 2.18 times more return on investment than Berjaya Food. However, ES Ceramics is 2.18 times more volatile than Berjaya Food Bhd. It trades about -0.14 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.33 per unit of risk. If you would invest 14.00 in ES Ceramics Technology on November 28, 2024 and sell it today you would lose (2.00) from holding ES Ceramics Technology or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| 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. Press Metal Bhd | ES Ceramics vs. Carlsberg Brewery Malaysia | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Ho Hup Construction |
| Berjaya Food vs. Advanced Packaging Tech | Berjaya Food vs. Riverview Rubber Estates | Berjaya Food vs. Duopharma Biotech Bhd | Berjaya Food vs. Kossan Rubber Industries |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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