Correlation Between Sunzen Biotech and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and Ho Hup 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 Sunzen Biotech and Ho Hup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunzen Biotech Bhd and Ho Hup Construction, you can compare the effects of market volatilities on Sunzen Biotech and Ho Hup 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 Sunzen Biotech with a short position of Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Ho Hup.
Diversification Opportunities for Sunzen Biotech and Ho Hup
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunzen and 5169 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and Ho Hup Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ho Hup Construction and Sunzen Biotech 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 Sunzen Biotech Bhd are associated (or correlated) with Ho Hup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ho Hup Construction has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and Ho Hup go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Ho Hup
Assuming the 90 days trading horizon Sunzen Biotech is expected to generate 139.67 times less return on investment than Ho Hup. But when comparing it to its historical volatility, Sunzen Biotech Bhd is 5.75 times less risky than Ho Hup. It trades about 0.0 of its potential returns per unit of risk. Ho Hup Construction is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Ho Hup Construction on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Ho Hup Construction or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Ho Hup Construction
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Ho Hup Construction |
Sunzen Biotech and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Ho Hup
The main advantage of trading using opposite Sunzen Biotech and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, Ho Hup 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 Ho Hup will offset losses from the drop in Ho Hup's long position.| Sunzen Biotech vs. Silver Ridge Holdings | Sunzen Biotech vs. Kossan Rubber Industries | Sunzen Biotech vs. Malaysia Steel Works | Sunzen Biotech vs. Southern Steel 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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