Correlation Between Arrow Syndicate and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Arrow Syndicate and Hwa Fong 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 Arrow Syndicate and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Syndicate Public and Hwa Fong Rubber, you can compare the effects of market volatilities on Arrow Syndicate and Hwa Fong 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 Arrow Syndicate with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Syndicate and Hwa Fong.
Diversification Opportunities for Arrow Syndicate and Hwa Fong
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Arrow and Hwa is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Syndicate Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Arrow Syndicate 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 Arrow Syndicate Public are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Arrow Syndicate i.e., Arrow Syndicate and Hwa Fong go up and down completely randomly.
Pair Corralation between Arrow Syndicate and Hwa Fong
Assuming the 90 days trading horizon Arrow Syndicate Public is expected to generate 0.79 times more return on investment than Hwa Fong. However, Arrow Syndicate Public is 1.27 times less risky than Hwa Fong. It trades about 0.0 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.26 per unit of risk. If you would invest 575.00 in Arrow Syndicate Public on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Arrow Syndicate Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Syndicate Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| Arrow Syndicate Public |
| Hwa Fong Rubber |
Arrow Syndicate and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Syndicate and Hwa Fong
The main advantage of trading using opposite Arrow Syndicate and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Syndicate position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| Arrow Syndicate vs. Wave Entertainment Public | Arrow Syndicate vs. Vibhavadi Medical Center | Arrow Syndicate vs. TPI Polene Public | Arrow Syndicate vs. Asia Green Energy |
| Hwa Fong vs. SCB X Public | Hwa Fong vs. Kasikornbank Public | Hwa Fong vs. PTT Public | Hwa Fong vs. Kasikornbank Public |
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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