Correlation Between Shangri La and Minetech Resources
Can any of the company-specific risk be diversified away by investing in both Shangri La and Minetech Resources 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 Shangri La and Minetech Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shangri La Hotels and Minetech Resources Bhd, you can compare the effects of market volatilities on Shangri La and Minetech Resources 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 Shangri La with a short position of Minetech Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Minetech Resources.
Diversification Opportunities for Shangri La and Minetech Resources
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shangri and Minetech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Minetech Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minetech Resources Bhd and Shangri La 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 Shangri La Hotels are associated (or correlated) with Minetech Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minetech Resources Bhd has no effect on the direction of Shangri La i.e., Shangri La and Minetech Resources go up and down completely randomly.
Pair Corralation between Shangri La and Minetech Resources
Assuming the 90 days trading horizon Shangri La Hotels is expected to generate 0.26 times more return on investment than Minetech Resources. However, Shangri La Hotels is 3.85 times less risky than Minetech Resources. It trades about 0.0 of its potential returns per unit of risk. Minetech Resources Bhd is currently generating about -0.11 per unit of risk. If you would invest 206.00 in Shangri La Hotels on October 7, 2024 and sell it today you would earn a total of 0.00 from holding Shangri La Hotels or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shangri La Hotels vs. Minetech Resources Bhd
Performance |
Timeline |
Shangri La Hotels |
Minetech Resources Bhd |
Shangri La and Minetech Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shangri La and Minetech Resources
The main advantage of trading using opposite Shangri La and Minetech Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, Minetech Resources 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 Minetech Resources will offset losses from the drop in Minetech Resources' long position.Shangri La vs. Steel Hawk Berhad | Shangri La vs. SSF Home Group | Shangri La vs. Oriental Food Industries | Shangri La vs. Binasat Communications Bhd |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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