Correlation Between Hong Leong and Dataprep Holdings
Can any of the company-specific risk be diversified away by investing in both Hong Leong and Dataprep Holdings 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 Dataprep Holdings 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 Dataprep Holdings Bhd, you can compare the effects of market volatilities on Hong Leong and Dataprep Holdings 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 Dataprep Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Leong and Dataprep Holdings.
Diversification Opportunities for Hong Leong and Dataprep Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hong and Dataprep is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hong Leong Bank and Dataprep Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataprep Holdings 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 Dataprep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataprep Holdings Bhd has no effect on the direction of Hong Leong i.e., Hong Leong and Dataprep Holdings go up and down completely randomly.
Pair Corralation between Hong Leong and Dataprep Holdings
Assuming the 90 days trading horizon Hong Leong is expected to generate 5.54 times less return on investment than Dataprep Holdings. But when comparing it to its historical volatility, Hong Leong Bank is 8.17 times less risky than Dataprep Holdings. It trades about 0.16 of its potential returns per unit of risk. Dataprep Holdings Bhd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Dataprep Holdings Bhd on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Dataprep Holdings Bhd or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Leong Bank vs. Dataprep Holdings Bhd
Performance |
| Timeline |
| Hong Leong Bank |
| Dataprep Holdings Bhd |
Hong Leong and Dataprep Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Leong and Dataprep Holdings
The main advantage of trading using opposite Hong Leong and Dataprep Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Leong position performs unexpectedly, Dataprep Holdings 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 Dataprep Holdings will offset losses from the drop in Dataprep Holdings' long position.| Hong Leong vs. Choo Bee Metal | Hong Leong vs. Lyc Healthcare Bhd | Hong Leong vs. Press Metal Bhd | Hong Leong vs. Central Industrial Corp |
| Dataprep Holdings vs. Apex Healthcare Bhd | Dataprep Holdings vs. Choo Bee Metal | Dataprep Holdings vs. TAS Offshore Bhd | Dataprep Holdings vs. Aeon Credit Service |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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