Correlation Between Impiana Hotels and Riverview Rubber
Can any of the company-specific risk be diversified away by investing in both Impiana Hotels and Riverview Rubber 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 Impiana Hotels and Riverview Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impiana Hotels Bhd and Riverview Rubber Estates, you can compare the effects of market volatilities on Impiana Hotels and Riverview Rubber 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 Impiana Hotels with a short position of Riverview Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and Riverview Rubber.
Diversification Opportunities for Impiana Hotels and Riverview Rubber
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Impiana and Riverview is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd and Riverview Rubber Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverview Rubber Estates and Impiana Hotels 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 Impiana Hotels Bhd are associated (or correlated) with Riverview Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverview Rubber Estates has no effect on the direction of Impiana Hotels i.e., Impiana Hotels and Riverview Rubber go up and down completely randomly.
Pair Corralation between Impiana Hotels and Riverview Rubber
Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to generate 2.64 times more return on investment than Riverview Rubber. However, Impiana Hotels is 2.64 times more volatile than Riverview Rubber Estates. It trades about 0.06 of its potential returns per unit of risk. Riverview Rubber Estates is currently generating about -0.01 per unit of risk. If you would invest 9.50 in Impiana Hotels Bhd on August 30, 2024 and sell it today you would earn a total of 11.50 from holding Impiana Hotels Bhd or generate 121.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.01% |
| Values | Daily Returns |
Impiana Hotels Bhd vs. Riverview Rubber Estates
Performance |
| Timeline |
| Impiana Hotels Bhd |
| Riverview Rubber Estates |
Impiana Hotels and Riverview Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impiana Hotels and Riverview Rubber
The main advantage of trading using opposite Impiana Hotels and Riverview Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impiana Hotels position performs unexpectedly, Riverview Rubber 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 Riverview Rubber will offset losses from the drop in Riverview Rubber's long position.| Impiana Hotels vs. Leader Steel Holdings | Impiana Hotels vs. Mycron Steel Bhd | Impiana Hotels vs. Sapura Industrial Bhd | Impiana Hotels vs. JF Technology BHD |
| Riverview Rubber vs. Press Metal Bhd | Riverview Rubber vs. PMB Technology Bhd | Riverview Rubber vs. British American Tobacco | Riverview Rubber vs. Sports Toto Berhad |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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