Correlation Between Kawan Food and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Kawan 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 Kawan 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 Kawan Food Bhd and Berjaya Food Bhd, you can compare the effects of market volatilities on Kawan 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 Kawan Food with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawan Food and Berjaya Food.
Diversification Opportunities for Kawan Food and Berjaya Food
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kawan and Berjaya is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kawan Food 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 Kawan 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 Kawan Food 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 Kawan Food i.e., Kawan Food and Berjaya Food go up and down completely randomly.
Pair Corralation between Kawan Food and Berjaya Food
Assuming the 90 days trading horizon Kawan Food Bhd is expected to generate 0.31 times more return on investment than Berjaya Food. However, Kawan Food Bhd is 3.19 times less risky than Berjaya Food. It trades about -0.06 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.11 per unit of risk. If you would invest 187.00 in Kawan Food Bhd on September 3, 2024 and sell it today you would lose (18.00) from holding Kawan Food Bhd or give up 9.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kawan Food Bhd vs. Berjaya Food Bhd
Performance |
| Timeline |
| Kawan Food Bhd |
| Berjaya Food Bhd |
Kawan Food and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawan Food and Berjaya Food
The main advantage of trading using opposite Kawan Food and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawan 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.| Kawan Food vs. British American Tobacco | Kawan Food vs. FARM FRESH BERHAD | Kawan Food vs. Apollo Food Holdings | Kawan Food vs. Oriental Food Industries |
| Berjaya Food vs. Shangri La Hotels | Berjaya Food vs. ECM Libra Financial | Berjaya Food vs. Minetech Resources Bhd | Berjaya Food vs. Swift Haulage 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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