Correlation Between YTL Hospitality and Axiata Group
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on YTL Hospitality and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Axiata Group.
Diversification Opportunities for YTL Hospitality and Axiata Group
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YTL and Axiata is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Axiata Group go up and down completely randomly.
Pair Corralation between YTL Hospitality and Axiata Group
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to generate 0.62 times more return on investment than Axiata Group. However, YTL Hospitality REIT is 1.62 times less risky than Axiata Group. It trades about 0.1 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.01 per unit of risk. If you would invest 95.00 in YTL Hospitality REIT on September 14, 2024 and sell it today you would earn a total of 24.00 from holding YTL Hospitality REIT or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Axiata Group Bhd
Performance |
| Timeline |
| YTL Hospitality REIT |
| Axiata Group Bhd |
YTL Hospitality and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Axiata Group
The main advantage of trading using opposite YTL Hospitality and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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