Correlation Between House Of and Berjaya Philippines

Can any of the company-specific risk be diversified away by investing in both House Of and Berjaya Philippines 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 House Of and Berjaya Philippines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between House of Investments and Berjaya Philippines, you can compare the effects of market volatilities on House Of and Berjaya Philippines 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 House Of with a short position of Berjaya Philippines. Check out your portfolio center. Please also check ongoing floating volatility patterns of House Of and Berjaya Philippines.

Diversification Opportunities for House Of and Berjaya Philippines

0.36

Correlation Coefficient

House Of  Berjaya Philippines

Weak diversification

The 3 months correlation between House and Berjaya is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding House of Investments and Berjaya Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berjaya Philippines and House Of 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 House of Investments are associated (or correlated) with Berjaya Philippines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berjaya Philippines has no effect on the direction of House Of i.e., House Of and Berjaya Philippines go up and down completely randomly.

Pair Corralation between House Of and Berjaya Philippines

Assuming the 90 days trading horizon House of Investments is expected to generate 0.52 times more return on investment than Berjaya Philippines. However, House of Investments is 1.94 times less risky than Berjaya Philippines. It trades about 0.02 of its potential returns per unit of risk. Berjaya Philippines is currently generating about -0.14 per unit of risk. If you would invest  338.00  in House of Investments on December 25, 2024 and sell it today you would earn a total of  2.00  from holding House of Investments or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.38%
Values	Daily Returns

House of Investments  vs.  Berjaya Philippines

House of Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in House of Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, House Of is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Berjaya Philippines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Berjaya Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with House Of and Berjaya Philippines

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

The idea behind House of Investments and Berjaya Philippines 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.