Correlation Between Berjaya Food and Insas Bhd
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Insas Bhd 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 Insas Bhd 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 Insas Bhd, you can compare the effects of market volatilities on Berjaya Food and Insas Bhd 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 Insas Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Insas Bhd.
Diversification Opportunities for Berjaya Food and Insas Bhd
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berjaya and Insas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Insas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insas 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 Insas Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insas Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Insas Bhd go up and down completely randomly.
Pair Corralation between Berjaya Food and Insas Bhd
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Insas Bhd. In addition to that, Berjaya Food is 1.93 times more volatile than Insas Bhd. It trades about -0.11 of its total potential returns per unit of risk. Insas Bhd is currently generating about -0.03 per unit of volatility. If you would invest 104.00 in Insas Bhd on September 3, 2024 and sell it today you would lose (9.00) from holding Insas Bhd or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berjaya Food Bhd vs. Insas Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Insas Bhd |
Berjaya Food and Insas Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Insas Bhd
The main advantage of trading using opposite Berjaya Food and Insas Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Insas Bhd 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 Insas Bhd will offset losses from the drop in Insas Bhd's long position.| Berjaya Food vs. Shangri La Hotels | Berjaya Food vs. ECM Libra Financial | Berjaya Food vs. Minetech Resources Bhd | Berjaya Food vs. Swift Haulage Bhd |
| Insas Bhd vs. Farm Price Holdings | Insas Bhd vs. MyTech Group Bhd | Insas Bhd vs. Star Media Group | Insas Bhd vs. Magni Tech Industries |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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