Correlation Between Oriental Food and Datasonic Group
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Datasonic Group 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 Datasonic Group 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 Datasonic Group Bhd, you can compare the effects of market volatilities on Oriental Food and Datasonic Group 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 Datasonic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Datasonic Group.
Diversification Opportunities for Oriental Food and Datasonic Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oriental and Datasonic is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Datasonic Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datasonic Group 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 Datasonic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datasonic Group Bhd has no effect on the direction of Oriental Food i.e., Oriental Food and Datasonic Group go up and down completely randomly.
Pair Corralation between Oriental Food and Datasonic Group
Assuming the 90 days trading horizon Oriental Food Industries is expected to under-perform the Datasonic Group. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Food Industries is 1.27 times less risky than Datasonic Group. The stock trades about -0.03 of its potential returns per unit of risk. The Datasonic Group Bhd is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Datasonic Group Bhd on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Datasonic Group Bhd or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Food Industries vs. Datasonic Group Bhd
Performance |
| Timeline |
| Oriental Food Industries |
| Datasonic Group Bhd |
Oriental Food and Datasonic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Datasonic Group
The main advantage of trading using opposite Oriental Food and Datasonic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Datasonic Group 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 Datasonic Group will offset losses from the drop in Datasonic Group's long position.| Oriental Food vs. Malaysia Steel Works | Oriental Food vs. Apex Healthcare Bhd | Oriental Food vs. Al Aqar Healthcare | Oriental Food vs. Choo Bee Metal |
| Datasonic Group vs. Lotte Chemical Titan | Datasonic Group vs. Oriental Food Industries | Datasonic Group vs. Binasat Communications Bhd | Datasonic Group vs. Uchi Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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