Correlation Between Public Bank and Hartalega Holdings
Can any of the company-specific risk be diversified away by investing in both Public Bank and Hartalega Holdings 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 Public Bank and Hartalega Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Bank Bhd and Hartalega Holdings Bhd, you can compare the effects of market volatilities on Public Bank and Hartalega Holdings 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 Public Bank with a short position of Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Hartalega Holdings.
Diversification Opportunities for Public Bank and Hartalega Holdings
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Public and Hartalega is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega Holdings Bhd and Public Bank 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 Public Bank Bhd are associated (or correlated) with Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of Public Bank i.e., Public Bank and Hartalega Holdings go up and down completely randomly.
Pair Corralation between Public Bank and Hartalega Holdings
Assuming the 90 days trading horizon Public Bank is expected to generate 8.77 times less return on investment than Hartalega Holdings. But when comparing it to its historical volatility, Public Bank Bhd is 3.78 times less risky than Hartalega Holdings. It trades about 0.03 of its potential returns per unit of risk. Hartalega Holdings Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Hartalega Holdings Bhd on September 5, 2024 and sell it today you would earn a total of 204.00 from holding Hartalega Holdings Bhd or generate 133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. Hartalega Holdings Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| Hartalega Holdings Bhd |
Public Bank and Hartalega Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Hartalega Holdings
The main advantage of trading using opposite Public Bank and Hartalega Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Hartalega Holdings 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 Hartalega Holdings will offset losses from the drop in Hartalega Holdings' long position.| Public Bank vs. Malayan Banking Bhd | Public Bank vs. Hong Leong Bank | Public Bank vs. Carlsberg Brewery Malaysia | Public Bank vs. Genetec Technology Bhd |
| Hartalega Holdings vs. Southern Steel Bhd | Hartalega Holdings vs. Public Bank Bhd | Hartalega Holdings vs. Computer Forms Bhd | Hartalega Holdings vs. CPE Technology Berhad |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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