Correlation Between Eonmetall Group and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Eonmetall Group 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 Eonmetall Group and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eonmetall Group Bhd and Berjaya Food Bhd, you can compare the effects of market volatilities on Eonmetall Group 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 Eonmetall Group with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eonmetall Group and Berjaya Food.
Diversification Opportunities for Eonmetall Group and Berjaya Food
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eonmetall and Berjaya is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eonmetall Group 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 Eonmetall Group 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 Eonmetall Group 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 Eonmetall Group i.e., Eonmetall Group and Berjaya Food go up and down completely randomly.
Pair Corralation between Eonmetall Group and Berjaya Food
Assuming the 90 days trading horizon Eonmetall Group Bhd is expected to generate 0.54 times more return on investment than Berjaya Food. However, Eonmetall Group Bhd is 1.84 times less risky than Berjaya Food. It trades about -0.04 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.06 per unit of risk. If you would invest 32.00 in Eonmetall Group Bhd on August 28, 2024 and sell it today you would lose (1.00) from holding Eonmetall Group Bhd or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eonmetall Group Bhd vs. Berjaya Food Bhd
Performance |
| Timeline |
| Eonmetall Group Bhd |
| Berjaya Food Bhd |
Eonmetall Group and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eonmetall Group and Berjaya Food
The main advantage of trading using opposite Eonmetall Group and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eonmetall Group 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.| Eonmetall Group vs. Leader Steel Holdings | Eonmetall Group vs. Binasat Communications Bhd | Eonmetall Group vs. Berjaya Food Bhd | Eonmetall Group vs. Homeritz 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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