Correlation Between Fenbo Holdings and HWH International
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings and HWH International 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 Fenbo Holdings and HWH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenbo Holdings Limited and HWH International, you can compare the effects of market volatilities on Fenbo Holdings and HWH International 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 Fenbo Holdings with a short position of HWH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and HWH International.
Diversification Opportunities for Fenbo Holdings and HWH International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fenbo and HWH is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and HWH International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HWH International and Fenbo 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 Fenbo Holdings Limited are associated (or correlated) with HWH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HWH International has no effect on the direction of Fenbo Holdings i.e., Fenbo Holdings and HWH International go up and down completely randomly.
Pair Corralation between Fenbo Holdings and HWH International
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the HWH International. But the stock apears to be less risky and, when comparing its historical volatility, Fenbo Holdings Limited is 1.19 times less risky than HWH International. The stock trades about -0.02 of its potential returns per unit of risk. The HWH International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 98.00 in HWH International on August 27, 2024 and sell it today you would lose (30.00) from holding HWH International or give up 30.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. HWH International
Performance |
| Timeline |
| Fenbo Holdings |
| HWH International |
Fenbo Holdings and HWH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and HWH International
The main advantage of trading using opposite Fenbo Holdings and HWH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings position performs unexpectedly, HWH International 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 HWH International will offset losses from the drop in HWH International's long position.| Fenbo Holdings vs. KNOT Offshore Partners | Fenbo Holdings vs. Aldel Financial II | Fenbo Holdings vs. Stepstone Group | Fenbo Holdings vs. Tencent Music Entertainment |
| HWH International vs. Nextplat Corp | HWH International vs. Monster Beverage Corp | HWH International vs. Vodka Brands Corp | HWH International vs. PepsiCo |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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