Correlation Between Minetech Resources and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Minetech Resources 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 Minetech Resources and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minetech Resources Bhd and Berjaya Food Bhd, you can compare the effects of market volatilities on Minetech Resources 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 Minetech Resources with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Berjaya Food.
Diversification Opportunities for Minetech Resources and Berjaya Food
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Minetech and Berjaya is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources 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 Minetech Resources 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 Minetech Resources 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 Minetech Resources i.e., Minetech Resources and Berjaya Food go up and down completely randomly.
Pair Corralation between Minetech Resources and Berjaya Food
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to generate 1.17 times more return on investment than Berjaya Food. However, Minetech Resources is 1.17 times more volatile than Berjaya Food Bhd. It trades about 0.03 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about -0.07 per unit of risk. If you would invest 13.00 in Minetech Resources Bhd on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Minetech Resources Bhd or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Berjaya Food Bhd
Performance |
| Timeline |
| Minetech Resources Bhd |
| Berjaya Food Bhd |
Minetech Resources and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Berjaya Food
The main advantage of trading using opposite Minetech Resources and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources 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.| Minetech Resources vs. Supercomnet Technologies Bhd | Minetech Resources vs. Mycron Steel Bhd | Minetech Resources vs. Dufu Tech Corp | Minetech Resources vs. Duopharma Biotech Bhd |
| Berjaya Food vs. Shangri La Hotels | Berjaya Food vs. Minetech Resources Bhd | Berjaya Food vs. Sunzen Biotech Bhd | Berjaya Food vs. ViTrox 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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