Correlation Between HeiTech Padu and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and Lysaght Galvanized 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 Lysaght Galvanized 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 Lysaght Galvanized Steel, you can compare the effects of market volatilities on HeiTech Padu and Lysaght Galvanized 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 Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and Lysaght Galvanized.
Diversification Opportunities for HeiTech Padu and Lysaght Galvanized
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HeiTech and Lysaght is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel 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 Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between HeiTech Padu and Lysaght Galvanized
Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to generate 2.07 times more return on investment than Lysaght Galvanized. However, HeiTech Padu is 2.07 times more volatile than Lysaght Galvanized Steel. It trades about 0.12 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about -0.05 per unit of risk. If you would invest 267.00 in HeiTech Padu Bhd on November 29, 2024 and sell it today you would earn a total of 16.00 from holding HeiTech Padu Bhd or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeiTech Padu Bhd vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| HeiTech Padu Bhd |
| Lysaght Galvanized Steel |
HeiTech Padu and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeiTech Padu and Lysaght Galvanized
The main advantage of trading using opposite HeiTech Padu and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeiTech Padu position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| HeiTech Padu vs. Ho Hup Construction | HeiTech Padu vs. Choo Bee Metal | HeiTech Padu vs. Riverview Rubber Estates | HeiTech Padu vs. Farm Price Holdings |
| Lysaght Galvanized vs. Farm Price Holdings | Lysaght Galvanized vs. Privasia Technology Bhd | Lysaght Galvanized vs. Sunway Construction Group | Lysaght Galvanized vs. Eonmetall Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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