Correlation Between Impiana Hotels and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Impiana Hotels and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on Impiana Hotels and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and Resintech Bhd.
Diversification Opportunities for Impiana Hotels and Resintech Bhd
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impiana and Resintech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Impiana Hotels i.e., Impiana Hotels and Resintech Bhd go up and down completely randomly.
Pair Corralation between Impiana Hotels and Resintech Bhd
Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to generate 2.11 times more return on investment than Resintech Bhd. However, Impiana Hotels is 2.11 times more volatile than Resintech Bhd. It trades about 0.14 of its potential returns per unit of risk. Resintech Bhd is currently generating about -0.16 per unit of risk. If you would invest 20.00 in Impiana Hotels Bhd on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Impiana Hotels Bhd or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impiana Hotels Bhd vs. Resintech Bhd
Performance |
| Timeline |
| Impiana Hotels Bhd |
| Resintech Bhd |
Impiana Hotels and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impiana Hotels and Resintech Bhd
The main advantage of trading using opposite Impiana Hotels and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impiana Hotels position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| Impiana Hotels vs. Computer Forms Bhd | Impiana Hotels vs. KPJ Healthcare Bhd | Impiana Hotels vs. Awanbiru Technology Bhd | Impiana Hotels vs. Tex Cycle Technology |
| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd vs. Bina Darulaman 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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