Correlation Between PIE Industrial and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both PIE Industrial 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 PIE Industrial and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and Berjaya Food Bhd, you can compare the effects of market volatilities on PIE Industrial 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 PIE Industrial with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and Berjaya Food.
Diversification Opportunities for PIE Industrial and Berjaya Food
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PIE and Berjaya is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd 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 PIE Industrial 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 PIE Industrial Bhd 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 PIE Industrial i.e., PIE Industrial and Berjaya Food go up and down completely randomly.
Pair Corralation between PIE Industrial and Berjaya Food
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to under-perform the Berjaya Food. But the stock apears to be less risky and, when comparing its historical volatility, PIE Industrial Bhd is 1.88 times less risky than Berjaya Food. The stock trades about -0.51 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 4, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIE Industrial Bhd vs. Berjaya Food Bhd
Performance |
| Timeline |
| PIE Industrial Bhd |
| Berjaya Food Bhd |
PIE Industrial and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and Berjaya Food
The main advantage of trading using opposite PIE Industrial and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial 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.| PIE Industrial vs. Kobay Tech Bhd | PIE Industrial vs. Systech Bhd | PIE Industrial vs. Radiant Globaltech Bhd | PIE Industrial vs. Pantech Group Holdings |
| Berjaya Food vs. Kawan Food Bhd | Berjaya Food vs. ES Ceramics Technology | Berjaya Food vs. EA Technique M | Berjaya Food vs. Globetronics Tech Bhd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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