Correlation Between YTL Hospitality and Cloudpoint Technology
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Cloudpoint Technology 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 Cloudpoint Technology 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 Cloudpoint Technology Berhad, you can compare the effects of market volatilities on YTL Hospitality and Cloudpoint Technology 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 Cloudpoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Cloudpoint Technology.
Diversification Opportunities for YTL Hospitality and Cloudpoint Technology
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between YTL and Cloudpoint is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Cloudpoint Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudpoint 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 Cloudpoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudpoint Technology has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Cloudpoint Technology go up and down completely randomly.
Pair Corralation between YTL Hospitality and Cloudpoint Technology
Assuming the 90 days trading horizon YTL Hospitality is expected to generate 2.3 times less return on investment than Cloudpoint Technology. But when comparing it to its historical volatility, YTL Hospitality REIT is 2.8 times less risky than Cloudpoint Technology. It trades about 0.08 of its potential returns per unit of risk. Cloudpoint Technology Berhad is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Cloudpoint Technology Berhad on September 14, 2024 and sell it today you would earn a total of 41.00 from holding Cloudpoint Technology Berhad or generate 83.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 79.3% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Cloudpoint Technology Berhad
Performance |
| Timeline |
| YTL Hospitality REIT |
| Cloudpoint Technology |
YTL Hospitality and Cloudpoint Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Cloudpoint Technology
The main advantage of trading using opposite YTL Hospitality and Cloudpoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Cloudpoint Technology 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 Cloudpoint Technology will offset losses from the drop in Cloudpoint Technology's long position.| YTL Hospitality vs. Senheng New Retail | YTL Hospitality vs. CSC Steel Holdings | YTL Hospitality vs. Carlsberg Brewery Malaysia | YTL Hospitality vs. Apex Healthcare Bhd |
| Cloudpoint Technology vs. Malayan Banking Bhd | Cloudpoint Technology vs. Public Bank Bhd | Cloudpoint Technology vs. Petronas Chemicals Group | Cloudpoint Technology vs. Tenaga Nasional 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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