Correlation Between Carsales and YTLBerhad
Can any of the company-specific risk be diversified away by investing in both Carsales and YTLBerhad 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 Carsales and YTLBerhad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom Ltd ADR and YTL Berhad, you can compare the effects of market volatilities on Carsales and YTLBerhad 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 Carsales with a short position of YTLBerhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and YTLBerhad.
Diversification Opportunities for Carsales and YTLBerhad
Very good diversification
The 3 months correlation between Carsales and YTLBerhad is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom Ltd ADR and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad and Carsales 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 CarsalesCom Ltd ADR are associated (or correlated) with YTLBerhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of Carsales i.e., Carsales and YTLBerhad go up and down completely randomly.
Pair Corralation between Carsales and YTLBerhad
Assuming the 90 days horizon Carsales is expected to generate 1.97 times less return on investment than YTLBerhad. But when comparing it to its historical volatility, CarsalesCom Ltd ADR is 1.73 times less risky than YTLBerhad. It trades about 0.05 of its potential returns per unit of risk. YTL Berhad is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 22.00 in YTL Berhad on November 2, 2024 and sell it today you would earn a total of 28.00 from holding YTL Berhad or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.84% |
| Values | Daily Returns |
CarsalesCom Ltd ADR vs. YTL Berhad
Performance |
| Timeline |
| CarsalesCom ADR |
| YTL Berhad |
Carsales and YTLBerhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and YTLBerhad
The main advantage of trading using opposite Carsales and YTLBerhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, YTLBerhad 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 YTLBerhad will offset losses from the drop in YTLBerhad's long position.| Carsales vs. Quizam Media | Carsales vs. DGTL Holdings | Carsales vs. Tinybeans Group Limited | Carsales vs. Sabio Holdings |
| YTLBerhad vs. Lindblad Expeditions Holdings | YTLBerhad vs. Afya | YTLBerhad vs. Mesa Air Group | YTLBerhad vs. Summit Materials |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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