Correlation Between Microlink Solutions and YTL Hospitality
Can any of the company-specific risk be diversified away by investing in both Microlink Solutions and YTL Hospitality 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 Microlink Solutions and YTL Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microlink Solutions Bhd and YTL Hospitality REIT, you can compare the effects of market volatilities on Microlink Solutions and YTL Hospitality 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 Microlink Solutions with a short position of YTL Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microlink Solutions and YTL Hospitality.
Diversification Opportunities for Microlink Solutions and YTL Hospitality
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microlink and YTL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microlink Solutions Bhd and YTL Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Hospitality REIT and Microlink Solutions 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 Microlink Solutions Bhd are associated (or correlated) with YTL Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Hospitality REIT has no effect on the direction of Microlink Solutions i.e., Microlink Solutions and YTL Hospitality go up and down completely randomly.
Pair Corralation between Microlink Solutions and YTL Hospitality
Assuming the 90 days trading horizon Microlink Solutions Bhd is expected to generate 16.6 times more return on investment than YTL Hospitality. However, Microlink Solutions is 16.6 times more volatile than YTL Hospitality REIT. It trades about 0.3 of its potential returns per unit of risk. YTL Hospitality REIT is currently generating about 0.0 per unit of risk. If you would invest 12.00 in Microlink Solutions Bhd on September 24, 2024 and sell it today you would earn a total of 10.00 from holding Microlink Solutions Bhd or generate 83.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Microlink Solutions Bhd vs. YTL Hospitality REIT
Performance |
Timeline |
Microlink Solutions Bhd |
YTL Hospitality REIT |
Microlink Solutions and YTL Hospitality Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microlink Solutions and YTL Hospitality
The main advantage of trading using opposite Microlink Solutions and YTL Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microlink Solutions position performs unexpectedly, YTL Hospitality 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 YTL Hospitality will offset losses from the drop in YTL Hospitality's long position.Microlink Solutions vs. Malayan Banking Bhd | Microlink Solutions vs. Public Bank Bhd | Microlink Solutions vs. Petronas Chemicals Group | Microlink Solutions vs. Tenaga Nasional Bhd |
YTL Hospitality vs. Al Aqar Healthcare | YTL Hospitality vs. OSK Holdings Bhd | YTL Hospitality vs. FARM FRESH BERHAD | YTL Hospitality vs. Pentamaster Bhd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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