Correlation Between Hengyuan Refining and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both Hengyuan Refining and Duopharma Biotech 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 Duopharma Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengyuan Refining and Duopharma Biotech Bhd, you can compare the effects of market volatilities on Hengyuan Refining and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengyuan Refining and Duopharma Biotech.
Diversification Opportunities for Hengyuan Refining and Duopharma Biotech
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengyuan and Duopharma is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hengyuan Refining and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of Hengyuan Refining i.e., Hengyuan Refining and Duopharma Biotech go up and down completely randomly.
Pair Corralation between Hengyuan Refining and Duopharma Biotech
Assuming the 90 days trading horizon Hengyuan Refining is expected to under-perform the Duopharma Biotech. In addition to that, Hengyuan Refining is 1.51 times more volatile than Duopharma Biotech Bhd. It trades about -0.04 of its total potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about 0.0 per unit of volatility. If you would invest 131.00 in Duopharma Biotech Bhd on September 2, 2024 and sell it today you would lose (8.00) from holding Duopharma Biotech Bhd or give up 6.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengyuan Refining vs. Duopharma Biotech Bhd
Performance |
| Timeline |
| Hengyuan Refining |
| Duopharma Biotech Bhd |
Hengyuan Refining and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengyuan Refining and Duopharma Biotech
The main advantage of trading using opposite Hengyuan Refining and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengyuan Refining position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech'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 |
| Duopharma Biotech vs. PMB Technology Bhd | Duopharma Biotech vs. Resintech Bhd | Duopharma Biotech vs. MClean Technologies Bhd | Duopharma Biotech vs. Cloudpoint 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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