Correlation Between Ho Hup and Public Bank
Can any of the company-specific risk be diversified away by investing in both Ho Hup and Public Bank 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 Ho Hup and Public Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ho Hup Construction and Public Bank Bhd, you can compare the effects of market volatilities on Ho Hup and Public Bank 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 Ho Hup with a short position of Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and Public Bank.
Diversification Opportunities for Ho Hup and Public Bank
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 5169 and Public is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank Bhd and Ho Hup 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 Ho Hup Construction are associated (or correlated) with Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of Ho Hup i.e., Ho Hup and Public Bank go up and down completely randomly.
Pair Corralation between Ho Hup and Public Bank
Assuming the 90 days trading horizon Ho Hup Construction is expected to under-perform the Public Bank. In addition to that, Ho Hup is 6.87 times more volatile than Public Bank Bhd. It trades about -0.05 of its total potential returns per unit of risk. Public Bank Bhd is currently generating about -0.08 per unit of volatility. If you would invest 449.00 in Public Bank Bhd on October 20, 2024 and sell it today you would lose (5.00) from holding Public Bank Bhd or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ho Hup Construction vs. Public Bank Bhd
Performance |
| Timeline |
| Ho Hup Construction |
| Public Bank Bhd |
Ho Hup and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ho Hup and Public Bank
The main advantage of trading using opposite Ho Hup and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's long position.| Ho Hup vs. YX Precious Metals | Ho Hup vs. Senheng New Retail | Ho Hup vs. Leader Steel Holdings | Ho Hup vs. Impiana Hotels Bhd |
| Public Bank vs. KPJ Healthcare Bhd | Public Bank vs. Diversified Gateway Solutions | Public Bank vs. Dataprep Holdings Bhd | Public Bank 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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