Correlation Between Lysaght Galvanized and HeiTech Padu
Can any of the company-specific risk be diversified away by investing in both Lysaght Galvanized and HeiTech Padu 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 Lysaght Galvanized and HeiTech Padu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lysaght Galvanized Steel and HeiTech Padu Bhd, you can compare the effects of market volatilities on Lysaght Galvanized and HeiTech Padu 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 Lysaght Galvanized with a short position of HeiTech Padu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysaght Galvanized and HeiTech Padu.
Diversification Opportunities for Lysaght Galvanized and HeiTech Padu
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lysaght and HeiTech is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lysaght Galvanized Steel and HeiTech Padu Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeiTech Padu Bhd and Lysaght Galvanized 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 Lysaght Galvanized Steel are associated (or correlated) with HeiTech Padu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeiTech Padu Bhd has no effect on the direction of Lysaght Galvanized i.e., Lysaght Galvanized and HeiTech Padu go up and down completely randomly.
Pair Corralation between Lysaght Galvanized and HeiTech Padu
Assuming the 90 days trading horizon Lysaght Galvanized Steel is expected to under-perform the HeiTech Padu. But the stock apears to be less risky and, when comparing its historical volatility, Lysaght Galvanized Steel is 2.07 times less risky than HeiTech Padu. The stock trades about -0.05 of its potential returns per unit of risk. The HeiTech Padu Bhd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 267.00 in HeiTech Padu Bhd on November 29, 2024 and sell it today you would earn a total of 16.00 from holding HeiTech Padu Bhd or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lysaght Galvanized Steel vs. HeiTech Padu Bhd
Performance |
| Timeline |
| Lysaght Galvanized Steel |
| HeiTech Padu Bhd |
Lysaght Galvanized and HeiTech Padu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysaght Galvanized and HeiTech Padu
The main advantage of trading using opposite Lysaght Galvanized and HeiTech Padu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysaght Galvanized position performs unexpectedly, HeiTech Padu 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 HeiTech Padu will offset losses from the drop in HeiTech Padu's long position.| Lysaght Galvanized vs. Farm Price Holdings | Lysaght Galvanized vs. Privasia Technology Bhd | Lysaght Galvanized vs. Sunway Construction Group | Lysaght Galvanized vs. Eonmetall Group Bhd |
| HeiTech Padu vs. Ho Hup Construction | HeiTech Padu vs. Choo Bee Metal | HeiTech Padu vs. Riverview Rubber Estates | HeiTech Padu vs. Farm Price Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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