Correlation Between Shangri La and Insas Bhd
Can any of the company-specific risk be diversified away by investing in both Shangri La and Insas Bhd 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 Insas Bhd 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 Insas Bhd, you can compare the effects of market volatilities on Shangri La and Insas Bhd 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 Insas Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Insas Bhd.
Diversification Opportunities for Shangri La and Insas Bhd
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shangri and Insas is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Insas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insas 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 Insas Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insas Bhd has no effect on the direction of Shangri La i.e., Shangri La and Insas Bhd go up and down completely randomly.
Pair Corralation between Shangri La and Insas Bhd
Assuming the 90 days trading horizon Shangri La Hotels is expected to generate 0.87 times more return on investment than Insas Bhd. However, Shangri La Hotels is 1.16 times less risky than Insas Bhd. It trades about -0.04 of its potential returns per unit of risk. Insas Bhd is currently generating about -0.29 per unit of risk. If you would invest 201.00 in Shangri La Hotels on November 28, 2024 and sell it today you would lose (1.00) from holding Shangri La Hotels or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Shangri La Hotels vs. Insas Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| Insas Bhd |
Shangri La and Insas Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Insas Bhd
The main advantage of trading using opposite Shangri La and Insas Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Insas Bhd 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 Insas Bhd will offset losses from the drop in Insas Bhd's long position.| Shangri La vs. Choo Bee Metal | Shangri La vs. Homeritz Bhd | Shangri La vs. Senheng New Retail | Shangri La vs. Binasat Communications Bhd |
| Insas Bhd vs. Central Industrial Corp | Insas Bhd vs. Techbond Group Bhd | Insas Bhd vs. K One Technology Bhd | Insas Bhd vs. Radiant Globaltech 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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