Correlation Between Hong Leong and PGF Capital
Can any of the company-specific risk be diversified away by investing in both Hong Leong and PGF Capital 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 Hong Leong and PGF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Leong Bank and PGF Capital Bhd, you can compare the effects of market volatilities on Hong Leong and PGF Capital 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 Hong Leong with a short position of PGF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Leong and PGF Capital.
Diversification Opportunities for Hong Leong and PGF Capital
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and PGF is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hong Leong Bank and PGF Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGF Capital Bhd and Hong Leong 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 Hong Leong Bank are associated (or correlated) with PGF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGF Capital Bhd has no effect on the direction of Hong Leong i.e., Hong Leong and PGF Capital go up and down completely randomly.
Pair Corralation between Hong Leong and PGF Capital
Assuming the 90 days trading horizon Hong Leong Bank is expected to generate 0.3 times more return on investment than PGF Capital. However, Hong Leong Bank is 3.38 times less risky than PGF Capital. It trades about 0.15 of its potential returns per unit of risk. PGF Capital Bhd is currently generating about -0.04 per unit of risk. If you would invest 2,020 in Hong Leong Bank on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Hong Leong Bank or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hong Leong Bank vs. PGF Capital Bhd
Performance |
| Timeline |
| Hong Leong Bank |
| PGF Capital Bhd |
Hong Leong and PGF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Leong and PGF Capital
The main advantage of trading using opposite Hong Leong and PGF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Leong position performs unexpectedly, PGF Capital 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 PGF Capital will offset losses from the drop in PGF Capital's long position.| Hong Leong vs. Ho Hup Construction | Hong Leong vs. Rubberex M | Hong Leong vs. Public Packages Holdings | Hong Leong vs. Daya Materials Bhd |
| PGF Capital vs. EA Technique M | PGF Capital vs. PIE Industrial Bhd | PGF Capital vs. Cosmos Technology International | PGF Capital vs. Sunzen Biotech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |