Correlation Between Homeritz Bhd and EA Technique
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd and EA Technique 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 EA Technique into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and EA Technique M, you can compare the effects of market volatilities on Homeritz Bhd and EA Technique 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 EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and EA Technique.
Diversification Opportunities for Homeritz Bhd and EA Technique
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Homeritz and 5259 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Homeritz Bhd i.e., Homeritz Bhd and EA Technique go up and down completely randomly.
Pair Corralation between Homeritz Bhd and EA Technique
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 1.19 times more return on investment than EA Technique. However, Homeritz Bhd is 1.19 times more volatile than EA Technique M. It trades about 0.07 of its potential returns per unit of risk. EA Technique M is currently generating about 0.01 per unit of risk. If you would invest 56.00 in Homeritz Bhd on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Homeritz Bhd or generate 1.79% 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. EA Technique M
Performance |
| Timeline |
| Homeritz Bhd |
| EA Technique M |
Homeritz Bhd and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and EA Technique
The main advantage of trading using opposite Homeritz Bhd and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique'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 |
| EA Technique vs. Kobay Tech Bhd | EA Technique vs. CPE Technology Berhad | EA Technique vs. Star Media Group | EA Technique 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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