Correlation Between Homeritz Bhd and Shangri La
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd 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 Homeritz Bhd and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and Shangri La Hotels, you can compare the effects of market volatilities on Homeritz Bhd 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 Homeritz Bhd with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and Shangri La.
Diversification Opportunities for Homeritz Bhd and Shangri La
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Homeritz and Shangri is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd 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 Homeritz Bhd 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 Homeritz Bhd 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 Homeritz Bhd i.e., Homeritz Bhd and Shangri La go up and down completely randomly.
Pair Corralation between Homeritz Bhd and Shangri La
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 0.94 times more return on investment than Shangri La. However, Homeritz Bhd is 1.06 times less risky than Shangri La. It trades about 0.04 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.01 per unit of risk. If you would invest 50.00 in Homeritz Bhd on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Homeritz Bhd or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homeritz Bhd vs. Shangri La Hotels
Performance |
| Timeline |
| Homeritz Bhd |
| Shangri La Hotels |
Homeritz Bhd and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and Shangri La
The main advantage of trading using opposite Homeritz Bhd and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd 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.| Homeritz Bhd vs. Malayan Banking Bhd | Homeritz Bhd vs. Public Bank Bhd | Homeritz Bhd vs. Petronas Chemicals Group | Homeritz Bhd vs. Tenaga Nasional Bhd |
| Shangri La vs. Berjaya Food Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La vs. Insas 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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