Correlation Between Oriental Food and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Oriental Food 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 Oriental Food and Berjaya Food 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 Berjaya Food Bhd, you can compare the effects of market volatilities on Oriental Food 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 Oriental Food with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Berjaya Food.
Diversification Opportunities for Oriental Food and Berjaya Food
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oriental and Berjaya is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries 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 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 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 Oriental Food i.e., Oriental Food and Berjaya Food go up and down completely randomly.
Pair Corralation between Oriental Food and Berjaya Food
Assuming the 90 days trading horizon Oriental Food Industries is expected to generate 0.66 times more return on investment than Berjaya Food. However, Oriental Food Industries is 1.52 times less risky than Berjaya Food. It trades about -0.01 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.03 per unit of risk. If you would invest 173.00 in Oriental Food Industries on November 3, 2024 and sell it today you would lose (15.00) from holding Oriental Food Industries or give up 8.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Oriental Food Industries vs. Berjaya Food Bhd
Performance |
| Timeline |
| Oriental Food Industries |
| Berjaya Food Bhd |
Oriental Food and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Berjaya Food
The main advantage of trading using opposite Oriental Food and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food 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.| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. Carlsberg Brewery Malaysia | Oriental Food vs. Sports Toto Berhad | Oriental Food vs. Sunway Construction Group |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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