Correlation Between Homeritz Bhd and Star Media
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd and Star Media 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 Star Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and Star Media Group, you can compare the effects of market volatilities on Homeritz Bhd and Star Media 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 Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and Star Media.
Diversification Opportunities for Homeritz Bhd and Star Media
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homeritz and Star is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media 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 Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of Homeritz Bhd i.e., Homeritz Bhd and Star Media go up and down completely randomly.
Pair Corralation between Homeritz Bhd and Star Media
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 0.76 times more return on investment than Star Media. However, Homeritz Bhd is 1.31 times less risky than Star Media. It trades about 0.06 of its potential returns per unit of risk. Star Media Group is currently generating about 0.01 per unit of risk. If you would invest 50.00 in Homeritz Bhd on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Homeritz Bhd or generate 22.0% 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. Star Media Group
Performance |
| Timeline |
| Homeritz Bhd |
| Star Media Group |
Homeritz Bhd and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and Star Media
The main advantage of trading using opposite Homeritz Bhd and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media'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 |
| Star Media vs. Media Prima Bhd | Star Media vs. Asia Media Group | Star Media vs. Advance Information Marketing |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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