Correlation Between YTL Hospitality and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Berjaya Food 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 Berjaya Food 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 Berjaya Food Bhd, you can compare the effects of market volatilities on YTL Hospitality and Berjaya Food 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 Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Berjaya Food.
Diversification Opportunities for YTL Hospitality and Berjaya Food
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between YTL and Berjaya is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Berjaya Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berjaya Food 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 Berjaya Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berjaya Food Bhd has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Berjaya Food go up and down completely randomly.
Pair Corralation between YTL Hospitality and Berjaya Food
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to under-perform the Berjaya Food. But the stock apears to be less risky and, when comparing its historical volatility, YTL Hospitality REIT is 2.93 times less risky than Berjaya Food. The stock trades about -0.17 of its potential returns per unit of risk. The Berjaya Food Bhd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Berjaya Food Bhd on November 30, 2024 and sell it today you would lose (2.00) from holding Berjaya Food Bhd or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Berjaya Food Bhd
Performance |
| Timeline |
| YTL Hospitality REIT |
| Berjaya Food Bhd |
YTL Hospitality and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Berjaya Food
The main advantage of trading using opposite YTL Hospitality and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Berjaya Food 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 Berjaya Food will offset losses from the drop in Berjaya Food's long position.| YTL Hospitality vs. MClean Technologies Bhd | YTL Hospitality vs. Sports Toto Berhad | YTL Hospitality vs. Choo Bee Metal |
| Berjaya Food vs. Advanced Packaging Tech | Berjaya Food vs. EA Technique M | Berjaya Food vs. Sunzen Biotech Bhd | Berjaya Food vs. Systech 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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