Correlation Between Star Media and Shangri La
Can any of the company-specific risk be diversified away by investing in both Star Media and Shangri La 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 Star Media and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Media Group and Shangri La Hotels, you can compare the effects of market volatilities on Star Media and Shangri La 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 Star Media with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Media and Shangri La.
Diversification Opportunities for Star Media and Shangri La
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Star and Shangri is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Star Media Group and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels and Star Media 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 Star Media Group are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Star Media i.e., Star Media and Shangri La go up and down completely randomly.
Pair Corralation between Star Media and Shangri La
Assuming the 90 days trading horizon Star Media Group is expected to generate 1.56 times more return on investment than Shangri La. However, Star Media is 1.56 times more volatile than Shangri La Hotels. It trades about 0.07 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.01 per unit of risk. If you would invest 40.00 in Star Media Group on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Star Media Group or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Media Group vs. Shangri La Hotels
Performance |
| Timeline |
| Star Media Group |
| Shangri La Hotels |
Star Media and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Media and Shangri La
The main advantage of trading using opposite Star Media and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Media position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| Star Media vs. Hong Leong Bank | Star Media vs. Cloudpoint Technology Berhad | Star Media vs. Eonmetall Group Bhd | Star Media vs. YX Precious Metals |
| Shangri La vs. Petronas Chemicals Group | Shangri La vs. Mercury Industries Bhd | Shangri La vs. Diversified Gateway Solutions | Shangri La vs. Aeon Credit Service |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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