Correlation Between YTL Hospitality and Telekom Malaysia
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia Bhd, you can compare the effects of market volatilities on YTL Hospitality and Telekom Malaysia 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 Telekom Malaysia. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Telekom Malaysia.
Diversification Opportunities for YTL Hospitality and Telekom Malaysia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between YTL and Telekom is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Telekom Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Malaysia Bhd 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 Telekom Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Malaysia Bhd has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Telekom Malaysia go up and down completely randomly.
Pair Corralation between YTL Hospitality and Telekom Malaysia
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to under-perform the Telekom Malaysia. But the stock apears to be less risky and, when comparing its historical volatility, YTL Hospitality REIT is 1.4 times less risky than Telekom Malaysia. The stock trades about 0.0 of its potential returns per unit of risk. The Telekom Malaysia Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 618.00 in Telekom Malaysia Bhd on September 5, 2024 and sell it today you would earn a total of 32.00 from holding Telekom Malaysia Bhd or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Telekom Malaysia Bhd
Performance |
| Timeline |
| YTL Hospitality REIT |
| Telekom Malaysia Bhd |
YTL Hospitality and Telekom Malaysia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Telekom Malaysia
The main advantage of trading using opposite YTL Hospitality and Telekom Malaysia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Telekom Malaysia 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 Telekom Malaysia will offset losses from the drop in Telekom Malaysia's long position.| YTL Hospitality vs. Minetech Resources Bhd | YTL Hospitality vs. Swift Haulage Bhd | YTL Hospitality vs. Insas Bhd | YTL Hospitality vs. Bina Darulaman Bhd |
| Telekom Malaysia vs. Al Aqar Healthcare | Telekom Malaysia vs. YX Precious Metals | Telekom Malaysia vs. YTL Hospitality REIT | Telekom Malaysia vs. Central Industrial Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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