Correlation Between Berjaya Food and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and CB Industrial 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 CB Industrial 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 CB Industrial Product, you can compare the effects of market volatilities on Berjaya Food and CB Industrial 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 CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and CB Industrial.
Diversification Opportunities for Berjaya Food and CB Industrial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berjaya and 7076 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product 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 CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Berjaya Food i.e., Berjaya Food and CB Industrial go up and down completely randomly.
Pair Corralation between Berjaya Food and CB Industrial
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to generate 2.54 times more return on investment than CB Industrial. However, Berjaya Food is 2.54 times more volatile than CB Industrial Product. It trades about 0.13 of its potential returns per unit of risk. CB Industrial Product is currently generating about -0.35 per unit of risk. If you would invest 35.00 in Berjaya Food Bhd on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Berjaya Food Bhd or generate 11.43% 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. CB Industrial Product
Performance |
| Timeline |
| Berjaya Food Bhd |
| CB Industrial Product |
Berjaya Food and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and CB Industrial
The main advantage of trading using opposite Berjaya Food and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Berjaya Food vs. Kawan Food Bhd | Berjaya Food vs. ES Ceramics Technology | Berjaya Food vs. EA Technique M | Berjaya Food vs. Globetronics Tech Bhd |
| CB Industrial vs. ECM Libra Financial | CB Industrial vs. Farm Price Holdings | CB Industrial vs. Sports Toto Berhad | CB Industrial vs. Al Aqar Healthcare |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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