Correlation Between Homeritz Bhd and SSF Home
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd and SSF Home 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 Homeritz Bhd and SSF Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and SSF Home Group, you can compare the effects of market volatilities on Homeritz Bhd and SSF Home 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 Homeritz Bhd with a short position of SSF Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and SSF Home.
Diversification Opportunities for Homeritz Bhd and SSF Home
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Homeritz and SSF is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group and Homeritz Bhd 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 Homeritz Bhd are associated (or correlated) with SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Homeritz Bhd i.e., Homeritz Bhd and SSF Home go up and down completely randomly.
Pair Corralation between Homeritz Bhd and SSF Home
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 1.84 times less return on investment than SSF Home. But when comparing it to its historical volatility, Homeritz Bhd is 1.67 times less risky than SSF Home. It trades about 0.06 of its potential returns per unit of risk. SSF Home Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in SSF Home Group on September 12, 2024 and sell it today you would earn a total of 10.00 from holding SSF Home Group or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homeritz Bhd vs. SSF Home Group
Performance |
| Timeline |
| Homeritz Bhd |
| SSF Home Group |
Homeritz Bhd and SSF Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and SSF Home
The main advantage of trading using opposite Homeritz Bhd and SSF Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd position performs unexpectedly, SSF Home 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 SSF Home will offset losses from the drop in SSF Home's long position.| Homeritz Bhd vs. Malayan Banking Bhd | Homeritz Bhd vs. Public Bank Bhd | Homeritz Bhd vs. Petronas Chemicals Group | Homeritz Bhd vs. Tenaga Nasional Bhd |
| SSF Home vs. Malayan Banking Bhd | SSF Home vs. Public Bank Bhd | SSF Home vs. Petronas Chemicals Group | SSF Home vs. IHH Healthcare 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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