Correlation Between Berjaya Philippines and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both Berjaya Philippines and Figaro Coffee 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 Berjaya Philippines and Figaro Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berjaya Philippines and Figaro Coffee Group, you can compare the effects of market volatilities on Berjaya Philippines and Figaro Coffee 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 Berjaya Philippines with a short position of Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Philippines and Figaro Coffee.
Diversification Opportunities for Berjaya Philippines and Figaro Coffee
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Berjaya and Figaro is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Philippines and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group and Berjaya Philippines 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 Berjaya Philippines are associated (or correlated) with Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of Berjaya Philippines i.e., Berjaya Philippines and Figaro Coffee go up and down completely randomly.
Pair Corralation between Berjaya Philippines and Figaro Coffee
Assuming the 90 days trading horizon Berjaya Philippines is expected to under-perform the Figaro Coffee. In addition to that, Berjaya Philippines is 1.19 times more volatile than Figaro Coffee Group. It trades about -0.29 of its total potential returns per unit of risk. Figaro Coffee Group is currently generating about -0.23 per unit of volatility. If you would invest 83.00 in Figaro Coffee Group on November 29, 2024 and sell it today you would lose (8.00) from holding Figaro Coffee Group or give up 9.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Berjaya Philippines vs. Figaro Coffee Group
Performance |
| Timeline |
| Berjaya Philippines |
| Figaro Coffee Group |
Berjaya Philippines and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Philippines and Figaro Coffee
The main advantage of trading using opposite Berjaya Philippines and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Philippines position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| Berjaya Philippines vs. Security Bank Corp | Berjaya Philippines vs. Jollibee Foods Corp | Berjaya Philippines vs. Robinsons Retail Holdings | Berjaya Philippines vs. National Reinsurance |
| Figaro Coffee vs. Integrated Micro Electronics | Figaro Coffee vs. Transpacific Broadband Group | Figaro Coffee vs. Crown Asia Chemicals | Figaro Coffee vs. Jollibee Foods Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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