Correlation Between Shangri La and Choo Bee
Can any of the company-specific risk be diversified away by investing in both Shangri La and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on Shangri La and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Choo Bee.
Diversification Opportunities for Shangri La and Choo Bee
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shangri and Choo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of Shangri La i.e., Shangri La and Choo Bee go up and down completely randomly.
Pair Corralation between Shangri La and Choo Bee
Assuming the 90 days trading horizon Shangri La Hotels is expected to under-perform the Choo Bee. But the stock apears to be less risky and, when comparing its historical volatility, Shangri La Hotels is 1.09 times less risky than Choo Bee. The stock trades about -0.04 of its potential returns per unit of risk. The Choo Bee Metal is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Choo Bee Metal on November 5, 2024 and sell it today you would lose (29.00) from holding Choo Bee Metal or give up 29.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotels vs. Choo Bee Metal
Performance |
| Timeline |
| Shangri La Hotels |
| Choo Bee Metal |
Shangri La and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Choo Bee
The main advantage of trading using opposite Shangri La and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.| Shangri La vs. Dnonce Tech Bhd | Shangri La vs. Cosmos Technology International | Shangri La vs. YX Precious Metals | Shangri La vs. Berjaya Food Bhd |
| Choo Bee vs. Radiant Globaltech Bhd | Choo Bee vs. Kobay Tech Bhd | Choo Bee vs. Public Bank Bhd | Choo Bee vs. Sports Toto Berhad |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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