Correlation Between Sunway Construction and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and Ho Hup 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 Sunway Construction and Ho Hup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and Ho Hup Construction, you can compare the effects of market volatilities on Sunway Construction and Ho Hup 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 Sunway Construction with a short position of Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Ho Hup.
Diversification Opportunities for Sunway Construction and Ho Hup
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunway and 5169 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and Ho Hup Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ho Hup Construction and Sunway Construction 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 Sunway Construction Group are associated (or correlated) with Ho Hup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ho Hup Construction has no effect on the direction of Sunway Construction i.e., Sunway Construction and Ho Hup go up and down completely randomly.
Pair Corralation between Sunway Construction and Ho Hup
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.95 times more return on investment than Ho Hup. However, Sunway Construction Group is 1.05 times less risky than Ho Hup. It trades about -0.03 of its potential returns per unit of risk. Ho Hup Construction is currently generating about -0.07 per unit of risk. If you would invest 469.00 in Sunway Construction Group on November 30, 2024 and sell it today you would lose (39.00) from holding Sunway Construction Group or give up 8.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. Ho Hup Construction
Performance |
| Timeline |
| Sunway Construction |
| Ho Hup Construction |
Sunway Construction and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Ho Hup
The main advantage of trading using opposite Sunway Construction and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, Ho Hup 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 Ho Hup will offset losses from the drop in Ho Hup's long position.| Sunway Construction vs. Nova Wellness Group | Sunway Construction vs. CPE Technology Berhad | Sunway Construction vs. Hong Leong Bank | Sunway Construction vs. Star Media Group |
| Ho Hup vs. Privasia Technology Bhd | Ho Hup vs. Tex Cycle Technology | Ho Hup vs. K One Technology Bhd | Ho Hup 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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