Correlation Between SSF Home and Shangri La
Can any of the company-specific risk be diversified away by investing in both SSF Home and Shangri La 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 SSF Home and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSF Home Group and Shangri La Hotels, you can compare the effects of market volatilities on SSF Home and Shangri La 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 SSF Home with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSF Home and Shangri La.
Diversification Opportunities for SSF Home and Shangri La
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSF and Shangri is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SSF Home Group and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels and SSF Home 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 SSF Home Group are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of SSF Home i.e., SSF Home and Shangri La go up and down completely randomly.
Pair Corralation between SSF Home and Shangri La
Assuming the 90 days trading horizon SSF Home Group is expected to generate 1.61 times more return on investment than Shangri La. However, SSF Home is 1.61 times more volatile than Shangri La Hotels. It trades about 0.06 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.01 per unit of risk. If you would invest 25.00 in SSF Home Group on September 4, 2024 and sell it today you would earn a total of 9.00 from holding SSF Home Group or generate 36.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSF Home Group vs. Shangri La Hotels
Performance |
| Timeline |
| SSF Home Group |
| Shangri La Hotels |
SSF Home and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSF Home and Shangri La
The main advantage of trading using opposite SSF Home and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSF Home position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| SSF Home vs. Star Media Group | SSF Home vs. Petronas Chemicals Group | SSF Home vs. Senheng New Retail | SSF Home vs. Silver Ridge Holdings |
| Shangri La vs. Berjaya Food Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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