Correlation Between Berjaya Food and Impiana Hotels
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Impiana Hotels 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 Impiana Hotels 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 Impiana Hotels Bhd, you can compare the effects of market volatilities on Berjaya Food and Impiana Hotels 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 Impiana Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Impiana Hotels.
Diversification Opportunities for Berjaya Food and Impiana Hotels
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Berjaya and Impiana is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Impiana Hotels Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impiana Hotels 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 Impiana Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impiana Hotels Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Impiana Hotels go up and down completely randomly.
Pair Corralation between Berjaya Food and Impiana Hotels
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Impiana Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Berjaya Food Bhd is 1.19 times less risky than Impiana Hotels. The stock trades about -0.33 of its potential returns per unit of risk. The Impiana Hotels Bhd is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Impiana Hotels Bhd on November 28, 2024 and sell it today you would lose (2.00) from holding Impiana Hotels Bhd or give up 8.7% 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. Impiana Hotels Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Impiana Hotels Bhd |
Berjaya Food and Impiana Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Impiana Hotels
The main advantage of trading using opposite Berjaya Food and Impiana Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Impiana Hotels 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 Impiana Hotels will offset losses from the drop in Impiana Hotels' long position.| Berjaya Food vs. Advanced Packaging Tech | Berjaya Food vs. Riverview Rubber Estates | Berjaya Food vs. Duopharma Biotech Bhd | Berjaya Food vs. Kossan Rubber Industries |
| Impiana Hotels vs. Privasia Technology Bhd | Impiana Hotels vs. ES Ceramics Technology | Impiana Hotels vs. CPE Technology Berhad | Impiana Hotels vs. ECM Libra Financial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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