Correlation Between Ho Hup and Protasco Bhd
Can any of the company-specific risk be diversified away by investing in both Ho Hup and Protasco Bhd 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 Protasco Bhd 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 Protasco Bhd, you can compare the effects of market volatilities on Ho Hup and Protasco Bhd 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 Protasco Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and Protasco Bhd.
Diversification Opportunities for Ho Hup and Protasco Bhd
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 5169 and Protasco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction and Protasco Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protasco 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 Protasco Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protasco Bhd has no effect on the direction of Ho Hup i.e., Ho Hup and Protasco Bhd go up and down completely randomly.
Pair Corralation between Ho Hup and Protasco Bhd
Assuming the 90 days trading horizon Ho Hup is expected to generate 16.62 times less return on investment than Protasco Bhd. But when comparing it to its historical volatility, Ho Hup Construction is 1.02 times less risky than Protasco Bhd. It trades about 0.0 of its potential returns per unit of risk. Protasco Bhd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Protasco Bhd on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Protasco Bhd or generate 82.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ho Hup Construction vs. Protasco Bhd
Performance |
| Timeline |
| Ho Hup Construction |
| Protasco Bhd |
Ho Hup and Protasco Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ho Hup and Protasco Bhd
The main advantage of trading using opposite Ho Hup and Protasco Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup position performs unexpectedly, Protasco Bhd 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 Protasco Bhd will offset losses from the drop in Protasco Bhd's long position.| Ho Hup vs. Sunway Construction Group | Ho Hup vs. JAKS Resources Bhd | Ho Hup vs. PESTECH International Bhd | Ho Hup vs. Tadmax Resources Berhad |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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