Correlation Between Hartalega Holdings and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Hartalega Holdings and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartalega Holdings and Axiata Group.
Diversification Opportunities for Hartalega Holdings and Axiata Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartalega and Axiata is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Hartalega Holdings i.e., Hartalega Holdings and Axiata Group go up and down completely randomly.
Pair Corralation between Hartalega Holdings and Axiata Group
Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to generate 1.41 times more return on investment than Axiata Group. However, Hartalega Holdings is 1.41 times more volatile than Axiata Group Bhd. It trades about 0.24 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.12 per unit of risk. If you would invest 317.00 in Hartalega Holdings Bhd on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Hartalega Holdings Bhd or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartalega Holdings Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| Hartalega Holdings Bhd |
| Axiata Group Bhd |
Hartalega Holdings and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartalega Holdings and Axiata Group
The main advantage of trading using opposite Hartalega Holdings and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartalega Holdings position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| Hartalega Holdings vs. YTL Hospitality REIT | Hartalega Holdings vs. Al Aqar Healthcare | Hartalega Holdings vs. Aeon Credit Service | Hartalega Holdings vs. Senheng New Retail |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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