Correlation Between YX Precious and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both YX Precious 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 YX Precious and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YX Precious Metals and Berjaya Food Bhd, you can compare the effects of market volatilities on YX Precious 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 YX Precious with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and Berjaya Food.
Diversification Opportunities for YX Precious and Berjaya Food
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0250 and Berjaya is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals 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 YX Precious 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 YX Precious Metals 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 YX Precious i.e., YX Precious and Berjaya Food go up and down completely randomly.
Pair Corralation between YX Precious and Berjaya Food
Assuming the 90 days trading horizon YX Precious Metals is expected to under-perform the Berjaya Food. But the stock apears to be less risky and, when comparing its historical volatility, YX Precious Metals is 2.5 times less risky than Berjaya Food. The stock trades about -0.25 of its potential returns per unit of risk. The Berjaya Food Bhd is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Berjaya Food Bhd on August 28, 2024 and sell it today you would lose (4.00) from holding Berjaya Food Bhd or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YX Precious Metals vs. Berjaya Food Bhd
Performance |
| Timeline |
| YX Precious Metals |
| Berjaya Food Bhd |
YX Precious and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YX Precious and Berjaya Food
The main advantage of trading using opposite YX Precious and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YX Precious 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.| YX Precious vs. Malayan Banking Bhd | YX Precious vs. Public Bank Bhd | YX Precious vs. Petronas Chemicals Group | YX Precious vs. Tenaga Nasional 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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