Correlation Between Dufu Tech and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Dufu Tech and Al Aqar 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 Dufu Tech and Al Aqar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dufu Tech Corp and Al Aqar Healthcare, you can compare the effects of market volatilities on Dufu Tech and Al Aqar 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 Dufu Tech with a short position of Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dufu Tech and Al Aqar.
Diversification Opportunities for Dufu Tech and Al Aqar
Very good diversification
The 3 months correlation between Dufu and 5116 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dufu Tech Corp and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare and Dufu Tech 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 Dufu Tech Corp are associated (or correlated) with Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Dufu Tech i.e., Dufu Tech and Al Aqar go up and down completely randomly.
Pair Corralation between Dufu Tech and Al Aqar
Assuming the 90 days trading horizon Dufu Tech Corp is expected to generate 1.51 times more return on investment than Al Aqar. However, Dufu Tech is 1.51 times more volatile than Al Aqar Healthcare. It trades about 0.29 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about -0.02 per unit of risk. If you would invest 169.00 in Dufu Tech Corp on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Dufu Tech Corp or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dufu Tech Corp vs. Al Aqar Healthcare
Performance |
| Timeline |
| Dufu Tech Corp |
| Al Aqar Healthcare |
Dufu Tech and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dufu Tech and Al Aqar
The main advantage of trading using opposite Dufu Tech and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dufu Tech position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.| Dufu Tech vs. PIE Industrial Bhd | Dufu Tech vs. Kobay Tech Bhd | Dufu Tech vs. JF Technology BHD | Dufu Tech vs. CB Industrial Product |
| Al Aqar vs. Eonmetall Group Bhd | Al Aqar vs. YX Precious Metals | Al Aqar vs. Public Bank Bhd | Al Aqar vs. IHH Healthcare 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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