Correlation Between Heng Leasing and Absolute Clean
Can any of the company-specific risk be diversified away by investing in both Heng Leasing and Absolute Clean 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 Heng Leasing and Absolute Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heng Leasing Capital and Absolute Clean Energy, you can compare the effects of market volatilities on Heng Leasing and Absolute Clean 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 Heng Leasing with a short position of Absolute Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heng Leasing and Absolute Clean.
Diversification Opportunities for Heng Leasing and Absolute Clean
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Heng and Absolute is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Heng Leasing Capital and Absolute Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Clean Energy and Heng Leasing 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 Heng Leasing Capital are associated (or correlated) with Absolute Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Clean Energy has no effect on the direction of Heng Leasing i.e., Heng Leasing and Absolute Clean go up and down completely randomly.
Pair Corralation between Heng Leasing and Absolute Clean
Assuming the 90 days trading horizon Heng Leasing Capital is expected to under-perform the Absolute Clean. But the stock apears to be less risky and, when comparing its historical volatility, Heng Leasing Capital is 17.41 times less risky than Absolute Clean. The stock trades about -0.06 of its potential returns per unit of risk. The Absolute Clean Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Absolute Clean Energy on August 29, 2024 and sell it today you would lose (136.00) from holding Absolute Clean Energy or give up 51.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heng Leasing Capital vs. Absolute Clean Energy
Performance |
| Timeline |
| Heng Leasing Capital |
| Absolute Clean Energy |
Heng Leasing and Absolute Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heng Leasing and Absolute Clean
The main advantage of trading using opposite Heng Leasing and Absolute Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heng Leasing position performs unexpectedly, Absolute Clean 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 Absolute Clean will offset losses from the drop in Absolute Clean's long position.| Heng Leasing vs. Amanah Leasing Public | Heng Leasing vs. Infraset Public | Heng Leasing vs. JMT Network Services |
| Absolute Clean vs. BCPG Public | Absolute Clean vs. Energy Absolute Public | Absolute Clean vs. Gunkul Engineering Public | Absolute Clean vs. Gulf Energy Development |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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