Correlation Between Shangri La and Homeritz Bhd
Can any of the company-specific risk be diversified away by investing in both Shangri La and Homeritz 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 Homeritz 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 Homeritz Bhd, you can compare the effects of market volatilities on Shangri La and Homeritz 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 Homeritz Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Homeritz Bhd.
Diversification Opportunities for Shangri La and Homeritz Bhd
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shangri and Homeritz is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Homeritz Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homeritz 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 Homeritz Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homeritz Bhd has no effect on the direction of Shangri La i.e., Shangri La and Homeritz Bhd go up and down completely randomly.
Pair Corralation between Shangri La and Homeritz Bhd
Assuming the 90 days trading horizon Shangri La Hotels is expected to under-perform the Homeritz Bhd. In addition to that, Shangri La is 1.06 times more volatile than Homeritz Bhd. It trades about -0.01 of its total potential returns per unit of risk. Homeritz Bhd is currently generating about 0.04 per unit of volatility. If you would invest 50.00 in Homeritz Bhd on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Homeritz Bhd or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotels vs. Homeritz Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| Homeritz Bhd |
Shangri La and Homeritz Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Homeritz Bhd
The main advantage of trading using opposite Shangri La and Homeritz Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Homeritz 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 Homeritz Bhd will offset losses from the drop in Homeritz Bhd's long position.| Shangri La vs. Berjaya Food Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La vs. Insas Bhd |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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