Correlation Between Berjaya Philippines and Pacificonline Systems

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

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

Diversification Opportunities for Berjaya Philippines and Pacificonline Systems

0.06

Correlation Coefficient

Berjaya Philippines  Pacificonline Systems

Significant diversification

The 3 months correlation between Berjaya and Pacificonline is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Philippines and Pacificonline Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacificonline Systems and Berjaya Philippines 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 Berjaya Philippines are associated (or correlated) with Pacificonline Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacificonline Systems has no effect on the direction of Berjaya Philippines i.e., Berjaya Philippines and Pacificonline Systems go up and down completely randomly.

Pair Corralation between Berjaya Philippines and Pacificonline Systems

Assuming the 90 days trading horizon Berjaya Philippines is expected to generate 2.54 times more return on investment than Pacificonline Systems. However, Berjaya Philippines is 2.54 times more volatile than Pacificonline Systems. It trades about 0.06 of its potential returns per unit of risk. Pacificonline Systems is currently generating about -0.04 per unit of risk. If you would invest  650.00  in Berjaya Philippines on April 11, 2025 and sell it today you would earn a total of  40.00  from holding Berjaya Philippines or generate 6.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Berjaya Philippines  vs.  Pacificonline Systems

Berjaya Philippines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berjaya Philippines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Berjaya Philippines unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pacificonline Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacificonline Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Berjaya Philippines and Pacificonline Systems

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

The idea behind Berjaya Philippines and Pacificonline Systems 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.