Correlation Between Berjaya Food and Aurelius Technologies
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Aurelius 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 Aurelius 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 Aurelius Technologies Bhd, you can compare the effects of market volatilities on Berjaya Food and Aurelius 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 Aurelius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Aurelius Technologies.
Diversification Opportunities for Berjaya Food and Aurelius Technologies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berjaya and Aurelius is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Aurelius Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius 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 Aurelius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Technologies Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Aurelius Technologies go up and down completely randomly.
Pair Corralation between Berjaya Food and Aurelius Technologies
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to generate 1.56 times more return on investment than Aurelius Technologies. However, Berjaya Food is 1.56 times more volatile than Aurelius Technologies Bhd. It trades about 0.07 of its potential returns per unit of risk. Aurelius Technologies Bhd is currently generating about 0.03 per unit of risk. If you would invest 36.00 in Berjaya Food Bhd on October 17, 2024 and sell it today you would earn a total of 1.00 from holding Berjaya Food Bhd or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Berjaya Food Bhd vs. Aurelius Technologies Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Aurelius Technologies Bhd |
Berjaya Food and Aurelius Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Aurelius Technologies
The main advantage of trading using opposite Berjaya Food and Aurelius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Aurelius 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 Aurelius Technologies will offset losses from the drop in Aurelius Technologies' long position.| Berjaya Food vs. Central Industrial Corp | Berjaya Food vs. PMB Technology Bhd | Berjaya Food vs. Melewar Industrial Group | Berjaya Food vs. Mercury Industries Bhd |
| Aurelius Technologies vs. Lyc Healthcare Bhd | Aurelius Technologies vs. PMB Technology Bhd | Aurelius Technologies vs. Oriental Food Industries | Aurelius Technologies vs. Berjaya Food 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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