Correlation Between Dataprep Holdings and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Dataprep Holdings 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 Dataprep Holdings and Ho Hup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dataprep Holdings Bhd and Ho Hup Construction, you can compare the effects of market volatilities on Dataprep Holdings 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 Dataprep Holdings with a short position of Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dataprep Holdings and Ho Hup.
Diversification Opportunities for Dataprep Holdings and Ho Hup
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dataprep and 5169 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dataprep Holdings Bhd 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 Dataprep Holdings 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 Dataprep Holdings Bhd 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 Dataprep Holdings i.e., Dataprep Holdings and Ho Hup go up and down completely randomly.
Pair Corralation between Dataprep Holdings and Ho Hup
Assuming the 90 days trading horizon Dataprep Holdings is expected to generate 18.61 times less return on investment than Ho Hup. But when comparing it to its historical volatility, Dataprep Holdings Bhd is 2.71 times less risky than Ho Hup. It trades about 0.01 of its potential returns per unit of risk. Ho Hup Construction is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Ho Hup Construction on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Ho Hup Construction or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dataprep Holdings Bhd vs. Ho Hup Construction
Performance |
| Timeline |
| Dataprep Holdings Bhd |
| Ho Hup Construction |
Dataprep Holdings and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dataprep Holdings and Ho Hup
The main advantage of trading using opposite Dataprep Holdings and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dataprep Holdings 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.| Dataprep Holdings vs. Choo Bee Metal | Dataprep Holdings vs. Nova Wellness Group | Dataprep Holdings vs. Rubberex M | Dataprep Holdings vs. Petronas Chemicals Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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