Correlation Between Hengyuan Refining and Dnonce Tech
Can any of the company-specific risk be diversified away by investing in both Hengyuan Refining and Dnonce Tech 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 Dnonce Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengyuan Refining and Dnonce Tech Bhd, you can compare the effects of market volatilities on Hengyuan Refining and Dnonce Tech 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 Dnonce Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengyuan Refining and Dnonce Tech.
Diversification Opportunities for Hengyuan Refining and Dnonce Tech
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hengyuan and Dnonce is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hengyuan Refining and Dnonce Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dnonce Tech 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 Dnonce Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dnonce Tech Bhd has no effect on the direction of Hengyuan Refining i.e., Hengyuan Refining and Dnonce Tech go up and down completely randomly.
Pair Corralation between Hengyuan Refining and Dnonce Tech
Assuming the 90 days trading horizon Hengyuan Refining is expected to generate 0.31 times more return on investment than Dnonce Tech. However, Hengyuan Refining is 3.18 times less risky than Dnonce Tech. It trades about -0.31 of its potential returns per unit of risk. Dnonce Tech Bhd is currently generating about -0.12 per unit of risk. If you would invest 199.00 in Hengyuan Refining on November 28, 2024 and sell it today you would lose (15.00) from holding Hengyuan Refining or give up 7.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hengyuan Refining vs. Dnonce Tech Bhd
Performance |
| Timeline |
| Hengyuan Refining |
| Dnonce Tech Bhd |
Hengyuan Refining and Dnonce Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengyuan Refining and Dnonce Tech
The main advantage of trading using opposite Hengyuan Refining and Dnonce Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengyuan Refining position performs unexpectedly, Dnonce Tech 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 Dnonce Tech will offset losses from the drop in Dnonce Tech's long position.| Hengyuan Refining vs. Lyc Healthcare Bhd | Hengyuan Refining vs. Mercury Industries Bhd | Hengyuan Refining vs. RHB Bank Bhd | Hengyuan Refining vs. YX Precious Metals |
| Dnonce Tech vs. Genetec Technology Bhd | Dnonce Tech vs. Radiant Globaltech Bhd | Dnonce Tech vs. KPJ Healthcare Bhd | Dnonce Tech vs. YTL Hospitality REIT |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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