Correlation Between Shangri La and Media Prima
Can any of the company-specific risk be diversified away by investing in both Shangri La and Media Prima 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 Media Prima 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 Media Prima Bhd, you can compare the effects of market volatilities on Shangri La and Media Prima 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 Media Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Media Prima.
Diversification Opportunities for Shangri La and Media Prima
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shangri and Media is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Media Prima Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Prima 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 Media Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Prima Bhd has no effect on the direction of Shangri La i.e., Shangri La and Media Prima go up and down completely randomly.
Pair Corralation between Shangri La and Media Prima
Assuming the 90 days trading horizon Shangri La is expected to generate 1.34 times less return on investment than Media Prima. In addition to that, Shangri La is 1.52 times more volatile than Media Prima Bhd. It trades about 0.06 of its total potential returns per unit of risk. Media Prima Bhd is currently generating about 0.13 per unit of volatility. If you would invest 47.00 in Media Prima Bhd on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Media Prima Bhd or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotels vs. Media Prima Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| Media Prima Bhd |
Shangri La and Media Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Media Prima
The main advantage of trading using opposite Shangri La and Media Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Media Prima 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 Media Prima will offset losses from the drop in Media Prima's long position.| Shangri La vs. Eversafe Rubber Bhd | Shangri La vs. Kossan Rubber Industries | Shangri La vs. Daya Materials Bhd | Shangri La vs. Apollo Food Holdings |
| Media Prima vs. Binasat Communications Bhd | Media Prima vs. Petronas Chemicals Group | Media Prima vs. Shangri La Hotels | Media Prima vs. Lotte Chemical Titan |
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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