Correlation Between Sungei Bagan and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan 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 Sungei Bagan and Ho Hup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and Ho Hup Construction, you can compare the effects of market volatilities on Sungei Bagan 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 Sungei Bagan with a short position of Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and Ho Hup.
Diversification Opportunities for Sungei Bagan and Ho Hup
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungei and 5169 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber 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 Sungei Bagan 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 Sungei Bagan Rubber 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 Sungei Bagan i.e., Sungei Bagan and Ho Hup go up and down completely randomly.
Pair Corralation between Sungei Bagan and Ho Hup
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the Ho Hup. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 8.34 times less risky than Ho Hup. The stock trades about -0.67 of its potential returns per unit of risk. The Ho Hup Construction is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Ho Hup Construction on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Ho Hup Construction or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. Ho Hup Construction
Performance |
| Timeline |
| Sungei Bagan Rubber |
| Ho Hup Construction |
Sungei Bagan and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and Ho Hup
The main advantage of trading using opposite Sungei Bagan and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan 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.| Sungei Bagan vs. British American Tobacco | Sungei Bagan vs. Oriental Food Industries | Sungei Bagan vs. Nova Wellness Group |
| Ho Hup vs. JAKS Resources Bhd | Ho Hup vs. Central Industrial Corp | Ho Hup vs. Protasco Bhd | Ho Hup vs. Mercury Industries 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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