Correlation Between Hengyuan Refining and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Hengyuan Refining and Computer Forms 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 Computer Forms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengyuan Refining and Computer Forms Bhd, you can compare the effects of market volatilities on Hengyuan Refining and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengyuan Refining and Computer Forms.
Diversification Opportunities for Hengyuan Refining and Computer Forms
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hengyuan and Computer is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hengyuan Refining and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Hengyuan Refining i.e., Hengyuan Refining and Computer Forms go up and down completely randomly.
Pair Corralation between Hengyuan Refining and Computer Forms
Assuming the 90 days trading horizon Hengyuan Refining is expected to under-perform the Computer Forms. But the stock apears to be less risky and, when comparing its historical volatility, Hengyuan Refining is 1.5 times less risky than Computer Forms. The stock trades about -0.5 of its potential returns per unit of risk. The Computer Forms Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Computer Forms Bhd on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Computer Forms Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengyuan Refining vs. Computer Forms Bhd
Performance |
| Timeline |
| Hengyuan Refining |
| Computer Forms Bhd |
Hengyuan Refining and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengyuan Refining and Computer Forms
The main advantage of trading using opposite Hengyuan Refining and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengyuan Refining position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' 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 |
| Computer Forms vs. Star Media Group | Computer Forms vs. Icon Offshore Bhd | Computer Forms vs. Lotte Chemical Titan | Computer Forms vs. CB Industrial Product |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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