Correlation Between Sungei Bagan and Shangri La
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan 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 Sungei Bagan and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and Shangri La Hotels, you can compare the effects of market volatilities on Sungei Bagan 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 Sungei Bagan with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and Shangri La.
Diversification Opportunities for Sungei Bagan and Shangri La
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungei and Shangri is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber 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 Sungei Bagan 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 Sungei Bagan Rubber 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 Sungei Bagan i.e., Sungei Bagan and Shangri La go up and down completely randomly.
Pair Corralation between Sungei Bagan and Shangri La
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the Shangri La. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 1.09 times less risky than Shangri La. The stock trades about -0.03 of its potential returns per unit of risk. The Shangri La Hotels is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Shangri La Hotels on November 2, 2024 and sell it today you would lose (2.00) from holding Shangri La Hotels or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. Shangri La Hotels
Performance |
| Timeline |
| Sungei Bagan Rubber |
| Shangri La Hotels |
Sungei Bagan and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and Shangri La
The main advantage of trading using opposite Sungei Bagan and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan 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.| Sungei Bagan vs. Rubberex M | Sungei Bagan vs. Public Packages Holdings | Sungei Bagan vs. Central Industrial Corp | Sungei Bagan vs. Berjaya Food Bhd |
| Shangri La vs. Press Metal Bhd | Shangri La vs. Central Industrial Corp | Shangri La vs. MClean Technologies Bhd | Shangri La vs. ECM Libra Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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