Correlation Between Central Industrial and Berjaya Food
Can any of the company-specific risk be diversified away by investing in both Central Industrial 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 Central Industrial and Berjaya Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Industrial Corp and Berjaya Food Bhd, you can compare the effects of market volatilities on Central Industrial 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 Central Industrial with a short position of Berjaya Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Industrial and Berjaya Food.
Diversification Opportunities for Central Industrial and Berjaya Food
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Central and Berjaya is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Central Industrial Corp 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 Central Industrial 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 Central Industrial Corp 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 Central Industrial i.e., Central Industrial and Berjaya Food go up and down completely randomly.
Pair Corralation between Central Industrial and Berjaya Food
Assuming the 90 days trading horizon Central Industrial is expected to generate 2.51 times less return on investment than Berjaya Food. But when comparing it to its historical volatility, Central Industrial Corp is 1.61 times less risky than Berjaya Food. It trades about 0.05 of its potential returns per unit of risk. Berjaya Food Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Berjaya Food Bhd on October 17, 2024 and sell it today you would earn a total of 1.00 from holding Berjaya Food Bhd or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Central Industrial Corp vs. Berjaya Food Bhd
Performance |
| Timeline |
| Central Industrial Corp |
| Berjaya Food Bhd |
Central Industrial and Berjaya Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Industrial and Berjaya Food
The main advantage of trading using opposite Central Industrial and Berjaya Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Industrial 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.| Central Industrial vs. Sunway Construction Group | Central Industrial vs. JAKS Resources Bhd | Central Industrial vs. PESTECH International Bhd | Central Industrial vs. Pesona Metro Holdings |
| Berjaya Food vs. Central Industrial Corp | Berjaya Food vs. PMB Technology Bhd | Berjaya Food vs. Melewar Industrial Group | Berjaya Food vs. Mercury Industries 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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