Correlation Between Digistar Bhd and HeiTech Padu
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and HeiTech Padu 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 Digistar Bhd and HeiTech Padu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and HeiTech Padu Bhd, you can compare the effects of market volatilities on Digistar Bhd and HeiTech Padu 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 Digistar Bhd with a short position of HeiTech Padu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and HeiTech Padu.
Diversification Opportunities for Digistar Bhd and HeiTech Padu
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digistar and HeiTech is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and HeiTech Padu Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeiTech Padu Bhd and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with HeiTech Padu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeiTech Padu Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and HeiTech Padu go up and down completely randomly.
Pair Corralation between Digistar Bhd and HeiTech Padu
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 4.29 times less return on investment than HeiTech Padu. In addition to that, Digistar Bhd is 1.01 times more volatile than HeiTech Padu Bhd. It trades about 0.03 of its total potential returns per unit of risk. HeiTech Padu Bhd is currently generating about 0.12 per unit of volatility. If you would invest 86.00 in HeiTech Padu Bhd on September 2, 2024 and sell it today you would earn a total of 235.00 from holding HeiTech Padu Bhd or generate 273.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. HeiTech Padu Bhd
Performance |
| Timeline |
| Digistar Bhd |
| HeiTech Padu Bhd |
Digistar Bhd and HeiTech Padu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and HeiTech Padu
The main advantage of trading using opposite Digistar Bhd and HeiTech Padu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, HeiTech Padu 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 HeiTech Padu will offset losses from the drop in HeiTech Padu's long position.| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Tenaga Nasional Bhd |
| HeiTech Padu vs. YTL Hospitality REIT | HeiTech Padu vs. YX Precious Metals | HeiTech Padu vs. DC HEALTHCARE HOLDINGS | HeiTech Padu vs. Malayan Banking 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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