Correlation Between Ho Hup and Sungei Bagan
Can any of the company-specific risk be diversified away by investing in both Ho Hup and Sungei Bagan 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 Sungei Bagan 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 Sungei Bagan Rubber, you can compare the effects of market volatilities on Ho Hup and Sungei Bagan 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 Sungei Bagan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and Sungei Bagan.
Diversification Opportunities for Ho Hup and Sungei Bagan
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 5169 and Sungei is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction and Sungei Bagan Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungei Bagan Rubber 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 Sungei Bagan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungei Bagan Rubber has no effect on the direction of Ho Hup i.e., Ho Hup and Sungei Bagan go up and down completely randomly.
Pair Corralation between Ho Hup and Sungei Bagan
Assuming the 90 days trading horizon Ho Hup Construction is expected to generate 6.63 times more return on investment than Sungei Bagan. However, Ho Hup is 6.63 times more volatile than Sungei Bagan Rubber. It trades about 0.12 of its potential returns per unit of risk. Sungei Bagan Rubber is currently generating about -0.35 per unit of risk. If you would invest 17.00 in Ho Hup Construction on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Ho Hup Construction or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ho Hup Construction vs. Sungei Bagan Rubber
Performance |
| Timeline |
| Ho Hup Construction |
| Sungei Bagan Rubber |
Ho Hup and Sungei Bagan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ho Hup and Sungei Bagan
The main advantage of trading using opposite Ho Hup and Sungei Bagan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup position performs unexpectedly, Sungei Bagan 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 Sungei Bagan will offset losses from the drop in Sungei Bagan's long position.| Ho Hup vs. Binasat Communications Bhd | Ho Hup vs. Southern Steel Bhd | Ho Hup vs. Malayan Banking Bhd | Ho Hup vs. Mycron Steel Bhd |
| Sungei Bagan vs. ES Ceramics Technology | Sungei Bagan vs. Cosmos Technology International | Sungei Bagan vs. Uchi Technologies Bhd | Sungei Bagan vs. Cengild Medical Berhad |
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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