Correlation Between Berjaya Food and Swift Haulage
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Swift Haulage 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 Swift Haulage 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 Swift Haulage Bhd, you can compare the effects of market volatilities on Berjaya Food and Swift Haulage 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 Swift Haulage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Swift Haulage.
Diversification Opportunities for Berjaya Food and Swift Haulage
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berjaya and Swift is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Swift Haulage Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Haulage 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 Swift Haulage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Haulage Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Swift Haulage go up and down completely randomly.
Pair Corralation between Berjaya Food and Swift Haulage
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Swift Haulage. In addition to that, Berjaya Food is 1.9 times more volatile than Swift Haulage Bhd. It trades about -0.29 of its total potential returns per unit of risk. Swift Haulage Bhd is currently generating about -0.11 per unit of volatility. If you would invest 48.00 in Swift Haulage Bhd on September 13, 2024 and sell it today you would lose (3.00) from holding Swift Haulage Bhd or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berjaya Food Bhd vs. Swift Haulage Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Swift Haulage Bhd |
Berjaya Food and Swift Haulage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Swift Haulage
The main advantage of trading using opposite Berjaya Food and Swift Haulage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Swift Haulage 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 Swift Haulage will offset losses from the drop in Swift Haulage's 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 |
| Swift Haulage vs. Malayan Banking Bhd | Swift Haulage vs. Public Bank Bhd | Swift Haulage vs. Petronas Chemicals Group | Swift Haulage vs. Tenaga Nasional 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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