Correlation Between Shangri La and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Shangri La and Berjaya Food 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 Berjaya Food 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 Berjaya Food Bhd, you can compare the effects of market volatilities on Shangri La and Berjaya Food 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 Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Berjaya Food.
Diversification Opportunities for Shangri La and Berjaya Food
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shangri and Berjaya is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Berjaya Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berjaya Food 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 Berjaya Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berjaya Food Bhd has no effect on the direction of Shangri La i.e., Shangri La and Berjaya Food go up and down completely randomly.
Pair Corralation between Shangri La and Berjaya Food
Assuming the 90 days trading horizon Shangri La Hotels is expected to under-perform the Berjaya Food. But the stock apears to be less risky and, when comparing its historical volatility, Shangri La Hotels is 4.88 times less risky than Berjaya Food. The stock trades about -0.07 of its potential returns per unit of risk. The Berjaya Food Bhd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Berjaya Food Bhd on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Berjaya Food Bhd or generate 11.43% 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. Berjaya Food Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| Berjaya Food Bhd |
Shangri La and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Berjaya Food
The main advantage of trading using opposite Shangri La and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Berjaya Food 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 Berjaya Food will offset losses from the drop in Berjaya Food's long position.| Shangri La vs. Malaysia Steel Works | Shangri La vs. Lotte Chemical Titan | Shangri La vs. Nova Wellness Group | Shangri La vs. Awanbiru Technology Bhd |
| Berjaya Food vs. Impiana Hotels Bhd | Berjaya Food vs. Sungei Bagan Rubber | Berjaya Food vs. YX Precious Metals | Berjaya Food vs. CB Industrial Product |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |