Correlation Between YTL Hospitality and Telekom Malaysia

Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and Telekom Malaysia 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 YTL Hospitality and Telekom Malaysia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YTL Hospitality REIT and Telekom Malaysia Bhd, you can compare the effects of market volatilities on YTL Hospitality and Telekom Malaysia 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 YTL Hospitality with a short position of Telekom Malaysia. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Telekom Malaysia.

Diversification Opportunities for YTL Hospitality and Telekom Malaysia

0.0

Correlation Coefficient

YTL Hospitality  Telekom Malaysia

Pay attention - limited upside

The 3 months correlation between YTL and Telekom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and Telekom Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Malaysia Bhd and YTL Hospitality 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 YTL Hospitality REIT are associated (or correlated) with Telekom Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Malaysia Bhd has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and Telekom Malaysia go up and down completely randomly.

Pair Corralation between YTL Hospitality and Telekom Malaysia

If you would invest  0.00  in Telekom Malaysia Bhd on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Telekom Malaysia Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

YTL Hospitality REIT  vs.  Telekom Malaysia Bhd

YTL Hospitality REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days YTL Hospitality REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Telekom Malaysia Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telekom Malaysia Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Telekom Malaysia is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with YTL Hospitality and Telekom Malaysia

The main advantage of trading using opposite YTL Hospitality and Telekom Malaysia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, Telekom Malaysia 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 Telekom Malaysia will offset losses from the drop in Telekom Malaysia's long position.

The idea behind YTL Hospitality REIT and Telekom Malaysia Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.