Correlation Between Chememan Public and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Chememan Public 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 Chememan Public and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chememan Public and Hwa Fong Rubber, you can compare the effects of market volatilities on Chememan Public 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 Chememan Public with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chememan Public and Hwa Fong.
Diversification Opportunities for Chememan Public and Hwa Fong
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chememan and Hwa is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chememan 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 Chememan Public 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 Chememan 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 Chememan Public i.e., Chememan Public and Hwa Fong go up and down completely randomly.
Pair Corralation between Chememan Public and Hwa Fong
Assuming the 90 days trading horizon Chememan Public is expected to generate 40.88 times less return on investment than Hwa Fong. But when comparing it to its historical volatility, Chememan Public is 25.71 times less risky than Hwa Fong. It trades about 0.03 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Hwa Fong Rubber on August 28, 2024 and sell it today you would lose (125.00) from holding Hwa Fong Rubber or give up 22.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Chememan Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| Chememan Public |
| Hwa Fong Rubber |
Chememan Public and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chememan Public and Hwa Fong
The main advantage of trading using opposite Chememan Public and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chememan Public 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.| Chememan Public vs. Gratitude Infinite Public | Chememan Public vs. Chukai Public | Chememan Public vs. AAPICO Hitech Public | Chememan Public vs. Cpt Drives Power |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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