Correlation Between Al Aqar and Shangri La
Can any of the company-specific risk be diversified away by investing in both Al Aqar and Shangri La 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 Al Aqar and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Aqar Healthcare and Shangri La Hotels, you can compare the effects of market volatilities on Al Aqar and Shangri La 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 Al Aqar with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Shangri La.
Diversification Opportunities for Al Aqar and Shangri La
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5116 and Shangri is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels and Al Aqar 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 Al Aqar Healthcare are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Al Aqar i.e., Al Aqar and Shangri La go up and down completely randomly.
Pair Corralation between Al Aqar and Shangri La
Assuming the 90 days trading horizon Al Aqar Healthcare is expected to generate 0.53 times more return on investment than Shangri La. However, Al Aqar Healthcare is 1.89 times less risky than Shangri La. It trades about 0.05 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.03 per unit of risk. If you would invest 121.00 in Al Aqar Healthcare on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Al Aqar Healthcare or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Shangri La Hotels
Performance |
| Timeline |
| Al Aqar Healthcare |
| Shangri La Hotels |
Al Aqar and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and Shangri La
The main advantage of trading using opposite Al Aqar and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| Al Aqar vs. PMB Technology Bhd | Al Aqar vs. Tex Cycle Technology | Al Aqar vs. Cosmos Technology International | Al Aqar vs. YX Precious Metals |
| Shangri La vs. Berjaya Food Bhd | Shangri La vs. ECM Libra Financial | Shangri La vs. Al Aqar Healthcare | Shangri La vs. PMB Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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