Correlation Between Dufu Tech and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Dufu Tech and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on Dufu Tech and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dufu Tech and Resintech Bhd.
Diversification Opportunities for Dufu Tech and Resintech Bhd
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dufu and Resintech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dufu Tech Corp and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Dufu Tech i.e., Dufu Tech and Resintech Bhd go up and down completely randomly.
Pair Corralation between Dufu Tech and Resintech Bhd
Assuming the 90 days trading horizon Dufu Tech Corp is expected to under-perform the Resintech Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Dufu Tech Corp is 1.14 times less risky than Resintech Bhd. The stock trades about -0.3 of its potential returns per unit of risk. The Resintech Bhd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Resintech Bhd on November 4, 2024 and sell it today you would lose (1.00) from holding Resintech Bhd or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dufu Tech Corp vs. Resintech Bhd
Performance |
| Timeline |
| Dufu Tech Corp |
| Resintech Bhd |
Dufu Tech and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dufu Tech and Resintech Bhd
The main advantage of trading using opposite Dufu Tech and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dufu Tech position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| Dufu Tech vs. YX Precious Metals | Dufu Tech vs. Mycron Steel Bhd | Dufu Tech vs. Sports Toto Berhad | Dufu Tech vs. ECM Libra Financial |
| Resintech Bhd vs. Choo Bee Metal | Resintech Bhd vs. Sports Toto Berhad | Resintech Bhd vs. FARM FRESH BERHAD | Resintech Bhd vs. KPJ 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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