Correlation Between IOI Bhd and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both IOI Bhd and FGV Holdings 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 FGV Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IOI Bhd and FGV Holdings Bhd, you can compare the effects of market volatilities on IOI Bhd and FGV Holdings 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 FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of IOI Bhd and FGV Holdings.
Diversification Opportunities for IOI Bhd and FGV Holdings
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IOI and FGV is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding IOI Bhd and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings 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 FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of IOI Bhd i.e., IOI Bhd and FGV Holdings go up and down completely randomly.
Pair Corralation between IOI Bhd and FGV Holdings
Assuming the 90 days trading horizon IOI Bhd is expected to generate 0.43 times more return on investment than FGV Holdings. However, IOI Bhd is 2.32 times less risky than FGV Holdings. It trades about -0.11 of its potential returns per unit of risk. FGV Holdings Bhd is currently generating about -0.1 per unit of risk. If you would invest 380.00 in IOI Bhd on October 23, 2024 and sell it today you would lose (5.00) from holding IOI Bhd or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
IOI Bhd vs. FGV Holdings Bhd
Performance |
| Timeline |
| IOI Bhd |
| FGV Holdings Bhd |
IOI Bhd and FGV Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IOI Bhd and FGV Holdings
The main advantage of trading using opposite IOI Bhd and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOI Bhd position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' long position.| IOI Bhd vs. Berjaya Food Bhd | IOI Bhd vs. Oriental Food Industries | IOI Bhd vs. Binasat Communications Bhd | IOI Bhd vs. RHB Bank Bhd |
| FGV Holdings vs. Sports Toto Berhad | FGV Holdings vs. Dataprep Holdings Bhd | FGV Holdings vs. Tex Cycle Technology | FGV Holdings vs. RHB Bank 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |