Correlation Between EA Technique and Homeritz Bhd
Can any of the company-specific risk be diversified away by investing in both EA Technique and Homeritz 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 EA Technique and Homeritz Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Technique M and Homeritz Bhd, you can compare the effects of market volatilities on EA Technique and Homeritz 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 EA Technique with a short position of Homeritz Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Homeritz Bhd.
Diversification Opportunities for EA Technique and Homeritz Bhd
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 5259 and Homeritz is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M and Homeritz Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homeritz Bhd and EA Technique 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 EA Technique M are associated (or correlated) with Homeritz Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homeritz Bhd has no effect on the direction of EA Technique i.e., EA Technique and Homeritz Bhd go up and down completely randomly.
Pair Corralation between EA Technique and Homeritz Bhd
Assuming the 90 days trading horizon EA Technique is expected to generate 16.75 times less return on investment than Homeritz Bhd. But when comparing it to its historical volatility, EA Technique M is 1.19 times less risky than Homeritz Bhd. It trades about 0.01 of its potential returns per unit of risk. Homeritz Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Homeritz Bhd on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Homeritz Bhd or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Technique M vs. Homeritz Bhd
Performance |
| Timeline |
| EA Technique M |
| Homeritz Bhd |
EA Technique and Homeritz Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Technique and Homeritz Bhd
The main advantage of trading using opposite EA Technique and Homeritz Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Technique position performs unexpectedly, Homeritz 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 Homeritz Bhd will offset losses from the drop in Homeritz Bhd's long position.| EA Technique vs. Kobay Tech Bhd | EA Technique vs. CPE Technology Berhad | EA Technique vs. Star Media Group | EA Technique vs. Resintech Bhd |
| Homeritz Bhd vs. Malayan Banking Bhd | Homeritz Bhd vs. Public Bank Bhd | Homeritz Bhd vs. Petronas Chemicals Group | Homeritz Bhd vs. Tenaga Nasional 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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