Correlation Between Nexgram Holdings and Hong Leong
Can any of the company-specific risk be diversified away by investing in both Nexgram Holdings and Hong Leong 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 Nexgram Holdings and Hong Leong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexgram Holdings Bhd and Hong Leong Bank, you can compare the effects of market volatilities on Nexgram Holdings and Hong Leong 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 Nexgram Holdings with a short position of Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexgram Holdings and Hong Leong.
Diversification Opportunities for Nexgram Holdings and Hong Leong
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexgram and Hong is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nexgram Holdings Bhd and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank and Nexgram Holdings 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 Nexgram Holdings Bhd are associated (or correlated) with Hong Leong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Leong Bank has no effect on the direction of Nexgram Holdings i.e., Nexgram Holdings and Hong Leong go up and down completely randomly.
Pair Corralation between Nexgram Holdings and Hong Leong
Assuming the 90 days trading horizon Nexgram Holdings Bhd is expected to generate 38.4 times more return on investment than Hong Leong. However, Nexgram Holdings is 38.4 times more volatile than Hong Leong Bank. It trades about 0.17 of its potential returns per unit of risk. Hong Leong Bank is currently generating about -0.08 per unit of risk. If you would invest 1.50 in Nexgram Holdings Bhd on November 5, 2024 and sell it today you would earn a total of 0.50 from holding Nexgram Holdings Bhd or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexgram Holdings Bhd vs. Hong Leong Bank
Performance |
| Timeline |
| Nexgram Holdings Bhd |
| Hong Leong Bank |
Nexgram Holdings and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexgram Holdings and Hong Leong
The main advantage of trading using opposite Nexgram Holdings and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexgram Holdings position performs unexpectedly, Hong Leong 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 Hong Leong will offset losses from the drop in Hong Leong's long position.| Nexgram Holdings vs. K One Technology Bhd | Nexgram Holdings vs. Kossan Rubber Industries | Nexgram Holdings vs. Sungei Bagan Rubber | Nexgram Holdings vs. Computer Forms Bhd |
| Hong Leong vs. Tex Cycle Technology | Hong Leong vs. Leader Steel Holdings | Hong Leong vs. Sports Toto Berhad | Hong Leong vs. Sapura Industrial 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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