Correlation Between Oriental Food and Media Prima
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Media Prima 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 Oriental Food and Media Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and Media Prima Bhd, you can compare the effects of market volatilities on Oriental Food and Media Prima 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 Oriental Food with a short position of Media Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Media Prima.
Diversification Opportunities for Oriental Food and Media Prima
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oriental and Media is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Media Prima Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Prima Bhd and Oriental Food 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 Oriental Food Industries are associated (or correlated) with Media Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Prima Bhd has no effect on the direction of Oriental Food i.e., Oriental Food and Media Prima go up and down completely randomly.
Pair Corralation between Oriental Food and Media Prima
Assuming the 90 days trading horizon Oriental Food Industries is expected to under-perform the Media Prima. In addition to that, Oriental Food is 2.73 times more volatile than Media Prima Bhd. It trades about -0.08 of its total potential returns per unit of risk. Media Prima Bhd is currently generating about 0.0 per unit of volatility. If you would invest 47.00 in Media Prima Bhd on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Media Prima Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oriental Food Industries vs. Media Prima Bhd
Performance |
| Timeline |
| Oriental Food Industries |
| Media Prima Bhd |
Oriental Food and Media Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Media Prima
The main advantage of trading using opposite Oriental Food and Media Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Media Prima 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 Media Prima will offset losses from the drop in Media Prima's long position.| Oriental Food vs. Shangri La Hotels | Oriental Food vs. Apex Healthcare Bhd | Oriental Food vs. Aeon Credit Service | Oriental Food vs. Impiana Hotels Bhd |
| Media Prima vs. Magni Tech Industries | Media Prima vs. ONETECH SOLUTIONS HOLDINGS | Media Prima vs. Resintech Bhd | Media Prima vs. Mycron Steel 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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