Correlation Between Aeon Credit and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Aeon Credit 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 Aeon Credit and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Credit Service and Berjaya Food Bhd, you can compare the effects of market volatilities on Aeon Credit 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 Aeon Credit with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Credit and Berjaya Food.
Diversification Opportunities for Aeon Credit and Berjaya Food
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeon and Berjaya is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Credit Service 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 Aeon Credit 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 Aeon Credit Service 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 Aeon Credit i.e., Aeon Credit and Berjaya Food go up and down completely randomly.
Pair Corralation between Aeon Credit and Berjaya Food
Assuming the 90 days trading horizon Aeon Credit Service is expected to generate 0.16 times more return on investment than Berjaya Food. However, Aeon Credit Service is 6.28 times less risky than Berjaya Food. It trades about -0.16 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.1 per unit of risk. If you would invest 707.00 in Aeon Credit Service on August 24, 2024 and sell it today you would lose (22.00) from holding Aeon Credit Service or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Credit Service vs. Berjaya Food Bhd
Performance |
| Timeline |
| Aeon Credit Service |
| Berjaya Food Bhd |
Aeon Credit and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Credit and Berjaya Food
The main advantage of trading using opposite Aeon Credit and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Credit 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.| Aeon Credit vs. Oriental Food Industries | Aeon Credit vs. Hong Leong Bank | Aeon Credit vs. Alliance Financial Group | Aeon Credit vs. Kawan Food Bhd |
| Berjaya Food vs. Awanbiru Technology Bhd | Berjaya Food vs. YX Precious Metals | Berjaya Food vs. Privasia Technology Bhd | Berjaya Food vs. PIE Industrial 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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