Correlation Between Hartalega Holdings and Senheng New
Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings and Senheng New 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 Hartalega Holdings and Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartalega Holdings Bhd and Senheng New Retail, you can compare the effects of market volatilities on Hartalega Holdings and Senheng New 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 Hartalega Holdings with a short position of Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartalega Holdings and Senheng New.
Diversification Opportunities for Hartalega Holdings and Senheng New
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartalega and Senheng is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail and Hartalega Holdings 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 Hartalega Holdings Bhd are associated (or correlated) with Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Hartalega Holdings i.e., Hartalega Holdings and Senheng New go up and down completely randomly.
Pair Corralation between Hartalega Holdings and Senheng New
Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to under-perform the Senheng New. But the stock apears to be less risky and, when comparing its historical volatility, Hartalega Holdings Bhd is 1.53 times less risky than Senheng New. The stock trades about -0.23 of its potential returns per unit of risk. The Senheng New Retail is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Senheng New Retail on October 20, 2024 and sell it today you would lose (2.00) from holding Senheng New Retail or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hartalega Holdings Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Hartalega Holdings Bhd |
| Senheng New Retail |
Hartalega Holdings and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartalega Holdings and Senheng New
The main advantage of trading using opposite Hartalega Holdings and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartalega Holdings position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Hartalega Holdings vs. Choo Bee Metal | Hartalega Holdings vs. Silver Ridge Holdings | Hartalega Holdings vs. Apollo Food Holdings | Hartalega Holdings vs. Petronas Chemicals Group |
| Senheng New vs. DC HEALTHCARE HOLDINGS | Senheng New vs. Choo Bee Metal | Senheng New vs. Awanbiru Technology Bhd | Senheng New vs. Eonmetall Group 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 Stocks Directory module to find actively traded stocks across global markets.
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