Correlation Between Choo Bee and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Choo Bee 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 Choo Bee and Ho Hup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Ho Hup Construction, you can compare the effects of market volatilities on Choo Bee 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 Choo Bee with a short position of Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Ho Hup.
Diversification Opportunities for Choo Bee and Ho Hup
Very weak diversification
The 3 months correlation between Choo and 5169 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal 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 Choo Bee 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 Choo Bee Metal 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 Choo Bee i.e., Choo Bee and Ho Hup go up and down completely randomly.
Pair Corralation between Choo Bee and Ho Hup
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Ho Hup. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 2.29 times less risky than Ho Hup. The stock trades about -0.06 of its potential returns per unit of risk. The Ho Hup Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Ho Hup Construction on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Ho Hup Construction or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Ho Hup Construction
Performance |
| Timeline |
| Choo Bee Metal |
| Ho Hup Construction |
Choo Bee and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Ho Hup
The main advantage of trading using opposite Choo Bee and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee 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.| Choo Bee vs. Binasat Communications Bhd | Choo Bee vs. Cosmos Technology International | Choo Bee vs. YX Precious Metals | Choo Bee vs. PMB Technology Bhd |
| Ho Hup vs. Dataprep Holdings Bhd | Ho Hup vs. MClean Technologies Bhd | Ho Hup vs. Leader Steel Holdings | Ho Hup vs. Lysaght Galvanized Steel |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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