Correlation Between HeiTech Padu and EA Technique
Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and EA Technique 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 EA Technique 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 EA Technique M, you can compare the effects of market volatilities on HeiTech Padu and EA Technique 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 EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and EA Technique.
Diversification Opportunities for HeiTech Padu and EA Technique
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HeiTech and 5259 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and EA Technique go up and down completely randomly.
Pair Corralation between HeiTech Padu and EA Technique
Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to generate 1.41 times more return on investment than EA Technique. However, HeiTech Padu is 1.41 times more volatile than EA Technique M. It trades about 0.13 of its potential returns per unit of risk. EA Technique M is currently generating about 0.02 per unit of risk. If you would invest 87.00 in HeiTech Padu Bhd on August 26, 2024 and sell it today you would earn a total of 260.00 from holding HeiTech Padu Bhd or generate 298.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeiTech Padu Bhd vs. EA Technique M
Performance |
| Timeline |
| HeiTech Padu Bhd |
| EA Technique M |
HeiTech Padu and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeiTech Padu and EA Technique
The main advantage of trading using opposite HeiTech Padu and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeiTech Padu position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique's long position.The idea behind HeiTech Padu Bhd and EA Technique M pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EA Technique vs. HeiTech Padu Bhd | EA Technique vs. Lysaght Galvanized Steel | EA Technique vs. Digistar Bhd | EA Technique vs. Swift Haulage 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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