Correlation Between Hartalega Holdings and Hong Leong
Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings 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 Hartalega Holdings and Hong Leong 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 Hong Leong Bank, you can compare the effects of market volatilities on Hartalega Holdings 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 Hartalega Holdings with a short position of Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartalega Holdings and Hong Leong.
Diversification Opportunities for Hartalega Holdings and Hong Leong
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartalega and Hong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank 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 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 Bank has no effect on the direction of Hartalega Holdings i.e., Hartalega Holdings and Hong Leong go up and down completely randomly.
Pair Corralation between Hartalega Holdings and Hong Leong
Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to generate 2.49 times more return on investment than Hong Leong. However, Hartalega Holdings is 2.49 times more volatile than Hong Leong Bank. It trades about 0.28 of its potential returns per unit of risk. Hong Leong Bank is currently generating about -0.18 per unit of risk. If you would invest 343.00 in Hartalega Holdings Bhd on September 18, 2024 and sell it today you would earn a total of 40.00 from holding Hartalega Holdings Bhd or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartalega Holdings Bhd vs. Hong Leong Bank
Performance |
| Timeline |
| Hartalega Holdings Bhd |
| Hong Leong Bank |
Hartalega Holdings and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartalega Holdings and Hong Leong
The main advantage of trading using opposite Hartalega Holdings and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartalega Holdings 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.| Hartalega Holdings vs. Kossan Rubber Industries | Hartalega Holdings vs. Rubberex M | Hartalega Holdings vs. Al Aqar Healthcare | Hartalega Holdings vs. PMB Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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