Correlation Between Hengyuan Refining and Impiana Hotels
Can any of the company-specific risk be diversified away by investing in both Hengyuan Refining and Impiana Hotels 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 Impiana Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengyuan Refining and Impiana Hotels Bhd, you can compare the effects of market volatilities on Hengyuan Refining and Impiana Hotels 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 Impiana Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengyuan Refining and Impiana Hotels.
Diversification Opportunities for Hengyuan Refining and Impiana Hotels
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hengyuan and Impiana is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hengyuan Refining and Impiana Hotels Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impiana Hotels 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 Impiana Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impiana Hotels Bhd has no effect on the direction of Hengyuan Refining i.e., Hengyuan Refining and Impiana Hotels go up and down completely randomly.
Pair Corralation between Hengyuan Refining and Impiana Hotels
Assuming the 90 days trading horizon Hengyuan Refining is expected to under-perform the Impiana Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Hengyuan Refining is 1.16 times less risky than Impiana Hotels. The stock trades about -0.28 of its potential returns per unit of risk. The Impiana Hotels Bhd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Impiana Hotels Bhd on August 24, 2024 and sell it today you would lose (1.00) from holding Impiana Hotels Bhd or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengyuan Refining vs. Impiana Hotels Bhd
Performance |
| Timeline |
| Hengyuan Refining |
| Impiana Hotels Bhd |
Hengyuan Refining and Impiana Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengyuan Refining and Impiana Hotels
The main advantage of trading using opposite Hengyuan Refining and Impiana Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengyuan Refining position performs unexpectedly, Impiana Hotels 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 Impiana Hotels will offset losses from the drop in Impiana Hotels' long position.| Hengyuan Refining vs. YX Precious Metals | Hengyuan Refining vs. Aeon Credit Service | Hengyuan Refining vs. Apollo Food Holdings | Hengyuan Refining vs. Privasia Technology Bhd |
| Impiana Hotels vs. Sports Toto Berhad | Impiana Hotels vs. Minetech Resources Bhd | Impiana Hotels vs. Swift Haulage Bhd | Impiana Hotels vs. Sunzen Biotech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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