Correlation Between Impiana Hotels and Sports Toto

Can any of the company-specific risk be diversified away by investing in both Impiana Hotels and Sports Toto 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 Impiana Hotels and Sports Toto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impiana Hotels Bhd and Sports Toto Berhad, you can compare the effects of market volatilities on Impiana Hotels and Sports Toto 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 Impiana Hotels with a short position of Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and Sports Toto.

Diversification Opportunities for Impiana Hotels and Sports Toto

0.54

Correlation Coefficient

Impiana Hotels  Sports Toto

Very weak diversification

The 3 months correlation between Impiana and Sports is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad and Impiana Hotels 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 Impiana Hotels Bhd are associated (or correlated) with Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Impiana Hotels i.e., Impiana Hotels and Sports Toto go up and down completely randomly.

Pair Corralation between Impiana Hotels and Sports Toto

Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to under-perform the Sports Toto. In addition to that, Impiana Hotels is 2.91 times more volatile than Sports Toto Berhad. It trades about -0.01 of its total potential returns per unit of risk. Sports Toto Berhad is currently generating about 0.14 per unit of volatility. If you would invest  143.00  in Sports Toto Berhad on November 29, 2024 and sell it today you would earn a total of  11.00  from holding Sports Toto Berhad or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Impiana Hotels Bhd  vs.  Sports Toto Berhad

Impiana Hotels Bhd

Risk-Adjusted Performance

Very Weak

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

Sports Toto Berhad

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sports Toto Berhad are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Sports Toto may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Impiana Hotels and Sports Toto

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

The idea behind Impiana Hotels Bhd and Sports Toto Berhad 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.