Correlation Between Greatech Technology and Hengyuan Refining
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Hengyuan Refining 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 Greatech Technology and Hengyuan Refining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Hengyuan Refining, you can compare the effects of market volatilities on Greatech Technology and Hengyuan Refining 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 Greatech Technology with a short position of Hengyuan Refining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Hengyuan Refining.
Diversification Opportunities for Greatech Technology and Hengyuan Refining
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatech and Hengyuan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Hengyuan Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengyuan Refining and Greatech Technology 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 Greatech Technology Bhd are associated (or correlated) with Hengyuan Refining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengyuan Refining has no effect on the direction of Greatech Technology i.e., Greatech Technology and Hengyuan Refining go up and down completely randomly.
Pair Corralation between Greatech Technology and Hengyuan Refining
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 0.78 times more return on investment than Hengyuan Refining. However, Greatech Technology Bhd is 1.29 times less risky than Hengyuan Refining. It trades about -0.02 of its potential returns per unit of risk. Hengyuan Refining is currently generating about -0.04 per unit of risk. If you would invest 238.00 in Greatech Technology Bhd on August 27, 2024 and sell it today you would lose (33.00) from holding Greatech Technology Bhd or give up 13.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Hengyuan Refining
Performance |
| Timeline |
| Greatech Technology Bhd |
| Hengyuan Refining |
Greatech Technology and Hengyuan Refining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Hengyuan Refining
The main advantage of trading using opposite Greatech Technology and Hengyuan Refining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Hengyuan Refining 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 Hengyuan Refining will offset losses from the drop in Hengyuan Refining's long position.| Greatech Technology vs. K One Technology Bhd | Greatech Technology vs. Petronas Chemicals Group | Greatech Technology vs. Coraza Integrated Technology | Greatech Technology vs. ES Ceramics Technology |
| Hengyuan Refining vs. Ho Hup Construction | Hengyuan Refining vs. Coraza Integrated Technology | Hengyuan Refining vs. K One Technology Bhd | Hengyuan Refining vs. Greatech Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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