Correlation Between Shangri La and Privasia Technology
Can any of the company-specific risk be diversified away by investing in both Shangri La and Privasia Technology 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 Shangri La and Privasia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shangri La Hotels and Privasia Technology Bhd, you can compare the effects of market volatilities on Shangri La and Privasia Technology 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 Shangri La with a short position of Privasia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Privasia Technology.
Diversification Opportunities for Shangri La and Privasia Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shangri and Privasia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Privasia Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Privasia Technology Bhd and Shangri La 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 Shangri La Hotels are associated (or correlated) with Privasia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Privasia Technology Bhd has no effect on the direction of Shangri La i.e., Shangri La and Privasia Technology go up and down completely randomly.
Pair Corralation between Shangri La and Privasia Technology
Assuming the 90 days trading horizon Shangri La Hotels is expected to generate 0.19 times more return on investment than Privasia Technology. However, Shangri La Hotels is 5.21 times less risky than Privasia Technology. It trades about -0.1 of its potential returns per unit of risk. Privasia Technology Bhd is currently generating about -0.18 per unit of risk. If you would invest 203.00 in Shangri La Hotels on August 24, 2024 and sell it today you would lose (4.00) from holding Shangri La Hotels or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shangri La Hotels vs. Privasia Technology Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| Privasia Technology Bhd |
Shangri La and Privasia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Privasia Technology
The main advantage of trading using opposite Shangri La and Privasia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Privasia Technology 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 Privasia Technology will offset losses from the drop in Privasia Technology's long position.| Shangri La vs. Scientex Packaging | Shangri La vs. UNIQUE | Shangri La vs. Dnonce Tech Bhd | Shangri La vs. Protasco Bhd |
| Privasia Technology vs. Dagang Nexchange Bhd | Privasia Technology vs. Datasonic Group Bhd | Privasia Technology vs. Awanbiru Technology Bhd | Privasia Technology vs. Dataprep Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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