Correlation Between Hengyuan Refining and Inari Amertron
Can any of the company-specific risk be diversified away by investing in both Hengyuan Refining and Inari Amertron 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 Hengyuan Refining and Inari Amertron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengyuan Refining and Inari Amertron Bhd, you can compare the effects of market volatilities on Hengyuan Refining and Inari Amertron 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 Hengyuan Refining with a short position of Inari Amertron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengyuan Refining and Inari Amertron.
Diversification Opportunities for Hengyuan Refining and Inari Amertron
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hengyuan and Inari is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hengyuan Refining and Inari Amertron Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Amertron Bhd and Hengyuan Refining 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 Hengyuan Refining are associated (or correlated) with Inari Amertron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Amertron Bhd has no effect on the direction of Hengyuan Refining i.e., Hengyuan Refining and Inari Amertron go up and down completely randomly.
Pair Corralation between Hengyuan Refining and Inari Amertron
Assuming the 90 days trading horizon Hengyuan Refining is expected to under-perform the Inari Amertron. But the stock apears to be less risky and, when comparing its historical volatility, Hengyuan Refining is 1.52 times less risky than Inari Amertron. The stock trades about -0.5 of its potential returns per unit of risk. The Inari Amertron Bhd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Inari Amertron Bhd on September 2, 2024 and sell it today you would lose (10.00) from holding Inari Amertron Bhd or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengyuan Refining vs. Inari Amertron Bhd
Performance |
| Timeline |
| Hengyuan Refining |
| Inari Amertron Bhd |
Hengyuan Refining and Inari Amertron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengyuan Refining and Inari Amertron
The main advantage of trading using opposite Hengyuan Refining and Inari Amertron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengyuan Refining position performs unexpectedly, Inari Amertron 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 Inari Amertron will offset losses from the drop in Inari Amertron's long position.| Hengyuan Refining vs. Senheng New Retail | Hengyuan Refining vs. Binasat Communications Bhd | Hengyuan Refining vs. Farm Price Holdings | Hengyuan Refining vs. SSF Home Group |
| Inari Amertron vs. Shangri La Hotels | Inari Amertron vs. Dataprep Holdings Bhd | Inari Amertron vs. CB Industrial Product | Inari Amertron vs. Alliance Financial Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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