Correlation Between IOI Bhd and PPB Group
Can any of the company-specific risk be diversified away by investing in both IOI Bhd and PPB Group 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 IOI Bhd and PPB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IOI Bhd and PPB Group Bhd, you can compare the effects of market volatilities on IOI Bhd and PPB Group 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 IOI Bhd with a short position of PPB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IOI Bhd and PPB Group.
Diversification Opportunities for IOI Bhd and PPB Group
Very weak diversification
The 3 months correlation between IOI and PPB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding IOI Bhd and PPB Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPB Group Bhd and IOI Bhd 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 IOI Bhd are associated (or correlated) with PPB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPB Group Bhd has no effect on the direction of IOI Bhd i.e., IOI Bhd and PPB Group go up and down completely randomly.
Pair Corralation between IOI Bhd and PPB Group
Assuming the 90 days trading horizon IOI Bhd is expected to generate 0.76 times more return on investment than PPB Group. However, IOI Bhd is 1.31 times less risky than PPB Group. It trades about -0.03 of its potential returns per unit of risk. PPB Group Bhd is currently generating about -0.21 per unit of risk. If you would invest 379.00 in IOI Bhd on October 26, 2024 and sell it today you would lose (4.00) from holding IOI Bhd or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IOI Bhd vs. PPB Group Bhd
Performance |
| Timeline |
| IOI Bhd |
| PPB Group Bhd |
IOI Bhd and PPB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IOI Bhd and PPB Group
The main advantage of trading using opposite IOI Bhd and PPB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOI Bhd position performs unexpectedly, PPB Group 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 PPB Group will offset losses from the drop in PPB Group's long position.| IOI Bhd vs. Nestle Bhd | IOI Bhd vs. PPB Group Bhd | IOI Bhd vs. FGV Holdings Bhd | IOI Bhd vs. British American Tobacco |
| PPB Group vs. Nestle Bhd | PPB Group vs. IOI Bhd | PPB Group vs. FGV Holdings Bhd | PPB Group vs. British American Tobacco |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |