Correlation Between Berjaya Food and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and MClean Technologies 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 Berjaya Food and MClean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berjaya Food Bhd and MClean Technologies Bhd, you can compare the effects of market volatilities on Berjaya Food and MClean Technologies 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 Berjaya Food with a short position of MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and MClean Technologies.
Diversification Opportunities for Berjaya Food and MClean Technologies
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berjaya and MClean is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and Berjaya Food 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 Berjaya Food Bhd are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and MClean Technologies go up and down completely randomly.
Pair Corralation between Berjaya Food and MClean Technologies
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the MClean Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Berjaya Food Bhd is 1.26 times less risky than MClean Technologies. The stock trades about -0.29 of its potential returns per unit of risk. The MClean Technologies Bhd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 26.00 in MClean Technologies Bhd on September 13, 2024 and sell it today you would earn a total of 3.00 from holding MClean Technologies Bhd or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berjaya Food Bhd vs. MClean Technologies Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| MClean Technologies Bhd |
Berjaya Food and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and MClean Technologies
The main advantage of trading using opposite Berjaya Food and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| Berjaya Food vs. Shangri La Hotels | Berjaya Food vs. ECM Libra Financial | Berjaya Food vs. Al Aqar Healthcare | Berjaya Food vs. PMB Technology Bhd |
| MClean Technologies vs. Computer Forms Bhd | MClean Technologies vs. Tex Cycle Technology | MClean Technologies vs. Al Aqar Healthcare | MClean Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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