Correlation Between Homeritz Bhd and Hong Leong
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd 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 Homeritz Bhd and Hong Leong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and Hong Leong Financial, you can compare the effects of market volatilities on Homeritz Bhd 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 Homeritz Bhd with a short position of Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and Hong Leong.
Diversification Opportunities for Homeritz Bhd and Hong Leong
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homeritz and Hong is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd and Hong Leong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Financial 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 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 Financial has no effect on the direction of Homeritz Bhd i.e., Homeritz Bhd and Hong Leong go up and down completely randomly.
Pair Corralation between Homeritz Bhd and Hong Leong
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 1.38 times more return on investment than Hong Leong. However, Homeritz Bhd is 1.38 times more volatile than Hong Leong Financial. It trades about 0.01 of its potential returns per unit of risk. Hong Leong Financial is currently generating about -0.03 per unit of risk. If you would invest 57.00 in Homeritz Bhd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Homeritz Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homeritz Bhd vs. Hong Leong Financial
Performance |
| Timeline |
| Homeritz Bhd |
| Hong Leong Financial |
Homeritz Bhd and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and Hong Leong
The main advantage of trading using opposite Homeritz Bhd and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd 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.| Homeritz Bhd vs. PIE Industrial Bhd | Homeritz Bhd vs. Oriental Food Industries | Homeritz Bhd vs. MClean Technologies Bhd | Homeritz Bhd vs. Public Packages Holdings |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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