Correlation Between HeiTech Padu and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and Resintech 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 Resintech 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 Resintech Bhd, you can compare the effects of market volatilities on HeiTech Padu and Resintech 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and Resintech Bhd.
Diversification Opportunities for HeiTech Padu and Resintech Bhd
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HeiTech and Resintech is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and Resintech Bhd go up and down completely randomly.
Pair Corralation between HeiTech Padu and Resintech Bhd
Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to generate 2.59 times more return on investment than Resintech Bhd. However, HeiTech Padu is 2.59 times more volatile than Resintech Bhd. It trades about 0.09 of its potential returns per unit of risk. Resintech Bhd is currently generating about 0.03 per unit of risk. If you would invest 69.00 in HeiTech Padu Bhd on August 31, 2024 and sell it today you would earn a total of 249.00 from holding HeiTech Padu Bhd or generate 360.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeiTech Padu Bhd vs. Resintech Bhd
Performance |
| Timeline |
| HeiTech Padu Bhd |
| Resintech Bhd |
HeiTech Padu and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeiTech Padu and Resintech Bhd
The main advantage of trading using opposite HeiTech Padu and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeiTech Padu position performs unexpectedly, Resintech 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| HeiTech Padu vs. Datasonic Group Bhd | HeiTech Padu vs. Awanbiru Technology Bhd | HeiTech Padu vs. Dataprep Holdings Bhd | HeiTech Padu vs. Systech Bhd |
| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd vs. Bina Darulaman 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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