Correlation Between Berjaya Food and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Berjaya Food and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Berjaya Food and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Computer Forms.
Diversification Opportunities for Berjaya Food and Computer Forms
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berjaya and Computer is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Berjaya Food i.e., Berjaya Food and Computer Forms go up and down completely randomly.
Pair Corralation between Berjaya Food and Computer Forms
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Computer Forms. But the stock apears to be less risky and, when comparing its historical volatility, Berjaya Food Bhd is 4.59 times less risky than Computer Forms. The stock trades about -0.33 of its potential returns per unit of risk. The Computer Forms Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Computer Forms Bhd on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Computer Forms Bhd or generate 0.0% 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. Computer Forms Bhd
Performance |
| Timeline |
| Berjaya Food Bhd |
| Computer Forms Bhd |
Berjaya Food and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Computer Forms
The main advantage of trading using opposite Berjaya Food and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' 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 |
| Computer Forms vs. Mercury Industries Bhd | Computer Forms vs. Awanbiru Technology Bhd | Computer Forms vs. IHH Healthcare Bhd | Computer Forms vs. CB Industrial Product |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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