Correlation Between Berjaya Food and Kawan Food
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Kawan Food 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 Kawan Food 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 Kawan Food Bhd, you can compare the effects of market volatilities on Berjaya Food and Kawan Food 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 Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Kawan Food.
Diversification Opportunities for Berjaya Food and Kawan Food
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Berjaya and Kawan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food 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 Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Kawan Food go up and down completely randomly.
Pair Corralation between Berjaya Food and Kawan Food
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Kawan Food. In addition to that, Berjaya Food is 5.46 times more volatile than Kawan Food Bhd. It trades about -0.28 of its total potential returns per unit of risk. Kawan Food Bhd is currently generating about -0.09 per unit of volatility. If you would invest 172.00 in Kawan Food Bhd on September 1, 2024 and sell it today you would lose (3.00) from holding Kawan Food Bhd or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berjaya Food Bhd vs. Kawan Food Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Kawan Food Bhd |
Berjaya Food and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Kawan Food
The main advantage of trading using opposite Berjaya Food and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| Berjaya Food vs. Shangri La Hotels | Berjaya Food vs. Digistar Bhd | Berjaya Food vs. Minetech Resources Bhd | Berjaya Food vs. Swift Haulage Bhd |
| Kawan Food vs. British American Tobacco | Kawan Food vs. FARM FRESH BERHAD | Kawan Food vs. Apollo Food Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |