Correlation Between Pantech Group and Hong Leong
Can any of the company-specific risk be diversified away by investing in both Pantech Group and Hong Leong 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 Pantech Group and Hong Leong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantech Group Holdings and Hong Leong Bank, you can compare the effects of market volatilities on Pantech Group and Hong Leong 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 Pantech Group with a short position of Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantech Group and Hong Leong.
Diversification Opportunities for Pantech Group and Hong Leong
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pantech and Hong is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pantech Group Holdings and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank and Pantech Group 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 Pantech Group Holdings are associated (or correlated) with Hong Leong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Leong Bank has no effect on the direction of Pantech Group i.e., Pantech Group and Hong Leong go up and down completely randomly.
Pair Corralation between Pantech Group and Hong Leong
Assuming the 90 days trading horizon Pantech Group Holdings is expected to generate 2.22 times more return on investment than Hong Leong. However, Pantech Group is 2.22 times more volatile than Hong Leong Bank. It trades about 0.06 of its potential returns per unit of risk. Hong Leong Bank is currently generating about 0.02 per unit of risk. If you would invest 65.00 in Pantech Group Holdings on August 30, 2024 and sell it today you would earn a total of 32.00 from holding Pantech Group Holdings or generate 49.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Pantech Group Holdings vs. Hong Leong Bank
Performance |
| Timeline |
| Pantech Group Holdings |
| Hong Leong Bank |
Pantech Group and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantech Group and Hong Leong
The main advantage of trading using opposite Pantech Group and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantech Group position performs unexpectedly, Hong Leong 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 Hong Leong will offset losses from the drop in Hong Leong's long position.| Pantech Group vs. Senheng New Retail | Pantech Group vs. Press Metal Bhd | Pantech Group vs. Impiana Hotels Bhd | Pantech Group vs. Radiant Globaltech Bhd |
| Hong Leong vs. Public Bank Bhd | Hong Leong vs. Dnonce Tech Bhd | Hong Leong vs. Carlsberg Brewery Malaysia | Hong Leong vs. Resintech 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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