Correlation Between HeiTech Padu and Digistar Bhd
Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and Digistar Bhd 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 HeiTech Padu and Digistar Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HeiTech Padu Bhd and Digistar Bhd, you can compare the effects of market volatilities on HeiTech Padu and Digistar Bhd 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 HeiTech Padu with a short position of Digistar Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and Digistar Bhd.
Diversification Opportunities for HeiTech Padu and Digistar Bhd
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HeiTech and Digistar is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and HeiTech Padu 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 HeiTech Padu Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and Digistar Bhd go up and down completely randomly.
Pair Corralation between HeiTech Padu and Digistar Bhd
Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to generate 0.99 times more return on investment than Digistar Bhd. However, HeiTech Padu Bhd is 1.01 times less risky than Digistar Bhd. It trades about 0.12 of its potential returns per unit of risk. Digistar Bhd is currently generating about 0.03 per unit of risk. If you would invest 86.00 in HeiTech Padu Bhd on September 2, 2024 and sell it today you would earn a total of 235.00 from holding HeiTech Padu Bhd or generate 273.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeiTech Padu Bhd vs. Digistar Bhd
Performance |
| Timeline |
| HeiTech Padu Bhd |
| Digistar Bhd |
HeiTech Padu and Digistar Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeiTech Padu and Digistar Bhd
The main advantage of trading using opposite HeiTech Padu and Digistar Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeiTech Padu position performs unexpectedly, Digistar Bhd 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 Digistar Bhd will offset losses from the drop in Digistar Bhd's long position.| HeiTech Padu vs. YTL Hospitality REIT | HeiTech Padu vs. YX Precious Metals | HeiTech Padu vs. DC HEALTHCARE HOLDINGS | HeiTech Padu vs. Malayan Banking Bhd |
| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Tenaga Nasional 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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