Correlation Between YTL Hospitality and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Alliance Financial 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 Alliance Financial 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 Alliance Financial Group, you can compare the effects of market volatilities on YTL Hospitality and Alliance Financial 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 Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Alliance Financial.
Diversification Opportunities for YTL Hospitality and Alliance Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YTL and Alliance is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial 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 Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Alliance Financial go up and down completely randomly.
Pair Corralation between YTL Hospitality and Alliance Financial
Assuming the 90 days trading horizon YTL Hospitality is expected to generate 4.64 times less return on investment than Alliance Financial. But when comparing it to its historical volatility, YTL Hospitality REIT is 2.09 times less risky than Alliance Financial. It trades about 0.06 of its potential returns per unit of risk. Alliance Financial Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Alliance Financial Group on November 4, 2024 and sell it today you would earn a total of 20.00 from holding Alliance Financial Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Alliance Financial Group
Performance |
| Timeline |
| YTL Hospitality REIT |
| Alliance Financial |
YTL Hospitality and Alliance Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Alliance Financial
The main advantage of trading using opposite YTL Hospitality and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.| YTL Hospitality vs. Rubberex M | YTL Hospitality vs. Cloudpoint Technology Berhad | YTL Hospitality vs. Al Aqar Healthcare | YTL Hospitality vs. Apex Healthcare Bhd |
| Alliance Financial vs. Nova Wellness Group | Alliance Financial vs. Binasat Communications Bhd | Alliance Financial vs. Ho Hup Construction | Alliance Financial vs. Homeritz 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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