Correlation Between YTL Hospitality and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and ES Ceramics 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 YTL Hospitality and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Hospitality REIT and ES Ceramics Technology, you can compare the effects of market volatilities on YTL Hospitality and ES Ceramics 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 YTL Hospitality with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and ES Ceramics.
Diversification Opportunities for YTL Hospitality and ES Ceramics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between YTL and 0100 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and YTL Hospitality 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 YTL Hospitality REIT are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and ES Ceramics go up and down completely randomly.
Pair Corralation between YTL Hospitality and ES Ceramics
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to under-perform the ES Ceramics. But the stock apears to be less risky and, when comparing its historical volatility, YTL Hospitality REIT is 5.14 times less risky than ES Ceramics. The stock trades about -0.11 of its potential returns per unit of risk. The ES Ceramics Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 16.00 in ES Ceramics Technology on October 10, 2024 and sell it today you would earn a total of 0.00 from holding ES Ceramics Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. ES Ceramics Technology
Performance |
| Timeline |
| YTL Hospitality REIT |
| ES Ceramics Technology |
YTL Hospitality and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and ES Ceramics
The main advantage of trading using opposite YTL Hospitality and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| YTL Hospitality vs. Al Aqar Healthcare | YTL Hospitality vs. Minetech Resources Bhd | YTL Hospitality vs. Tambun Indah Land | YTL Hospitality vs. OpenSys M Bhd |
| ES Ceramics vs. Mycron Steel Bhd | ES Ceramics vs. Southern Steel Bhd | ES Ceramics vs. Rubberex M | ES Ceramics vs. Senheng New Retail |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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