Correlation Between Advance Synergy and Oriental Food
Can any of the company-specific risk be diversified away by investing in both Advance Synergy and Oriental 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 Advance Synergy and Oriental Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Synergy Bhd and Oriental Food Industries, you can compare the effects of market volatilities on Advance Synergy and Oriental 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 Advance Synergy with a short position of Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Synergy and Oriental Food.
Diversification Opportunities for Advance Synergy and Oriental Food
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advance and Oriental is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Advance Synergy Bhd and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries and Advance Synergy 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 Advance Synergy Bhd are associated (or correlated) with Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Advance Synergy i.e., Advance Synergy and Oriental Food go up and down completely randomly.
Pair Corralation between Advance Synergy and Oriental Food
Assuming the 90 days trading horizon Advance Synergy Bhd is expected to under-perform the Oriental Food. In addition to that, Advance Synergy is 2.06 times more volatile than Oriental Food Industries. It trades about -0.05 of its total potential returns per unit of risk. Oriental Food Industries is currently generating about -0.08 per unit of volatility. If you would invest 175.00 in Oriental Food Industries on August 27, 2024 and sell it today you would lose (6.00) from holding Oriental Food Industries or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Synergy Bhd vs. Oriental Food Industries
Performance |
| Timeline |
| Advance Synergy Bhd |
| Oriental Food Industries |
Advance Synergy and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Synergy and Oriental Food
The main advantage of trading using opposite Advance Synergy and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Synergy position performs unexpectedly, Oriental 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| Advance Synergy vs. Oriental Food Industries | Advance Synergy vs. Eversafe Rubber Bhd | Advance Synergy vs. ONETECH SOLUTIONS HOLDINGS | Advance Synergy vs. Kluang Rubber |
| Oriental Food vs. Kossan Rubber Industries | Oriental Food vs. Kluang Rubber | Oriental Food vs. British American Tobacco | Oriental Food vs. Computer Forms 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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