Correlation Between Sunway Construction and Impiana Hotels
Can any of the company-specific risk be diversified away by investing in both Sunway Construction 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 Sunway Construction and Impiana Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and Impiana Hotels Bhd, you can compare the effects of market volatilities on Sunway Construction 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 Sunway Construction with a short position of Impiana Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Impiana Hotels.
Diversification Opportunities for Sunway Construction and Impiana Hotels
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunway and Impiana is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group 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 Sunway Construction 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 Sunway Construction Group 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 Sunway Construction i.e., Sunway Construction and Impiana Hotels go up and down completely randomly.
Pair Corralation between Sunway Construction and Impiana Hotels
Assuming the 90 days trading horizon Sunway Construction Group is expected to under-perform the Impiana Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Sunway Construction Group is 1.41 times less risky than Impiana Hotels. The stock trades about -0.1 of its potential returns per unit of risk. The Impiana Hotels Bhd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Impiana Hotels Bhd on August 24, 2024 and sell it today you would lose (1.00) from holding Impiana Hotels Bhd or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. Impiana Hotels Bhd
Performance |
| Timeline |
| Sunway Construction |
| Impiana Hotels Bhd |
Sunway Construction and Impiana Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Impiana Hotels
The main advantage of trading using opposite Sunway Construction and Impiana Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction 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.| Sunway Construction vs. PESTECH International Bhd | Sunway Construction vs. Pesona Metro Holdings | Sunway Construction vs. Central Industrial Corp | Sunway Construction vs. Protasco Bhd |
| Impiana Hotels vs. Sports Toto Berhad | Impiana Hotels vs. Digistar Bhd | Impiana Hotels vs. Minetech Resources Bhd | Impiana Hotels vs. OpenSys M 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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