Correlation Between Heng Leasing and KT Medical
Can any of the company-specific risk be diversified away by investing in both Heng Leasing and KT Medical 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 KT Medical 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 KT Medical Service, you can compare the effects of market volatilities on Heng Leasing and KT Medical 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 KT Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heng Leasing and KT Medical.
Diversification Opportunities for Heng Leasing and KT Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heng and KTMS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Heng Leasing Capital and KT Medical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Medical Service 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 KT Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Medical Service has no effect on the direction of Heng Leasing i.e., Heng Leasing and KT Medical go up and down completely randomly.
Pair Corralation between Heng Leasing and KT Medical
Assuming the 90 days trading horizon Heng Leasing Capital is expected to generate 0.57 times more return on investment than KT Medical. However, Heng Leasing Capital is 1.76 times less risky than KT Medical. It trades about 0.24 of its potential returns per unit of risk. KT Medical Service is currently generating about -0.14 per unit of risk. If you would invest 106.00 in Heng Leasing Capital on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Heng Leasing Capital or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heng Leasing Capital vs. KT Medical Service
Performance |
| Timeline |
| Heng Leasing Capital |
| KT Medical Service |
Heng Leasing and KT Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heng Leasing and KT Medical
The main advantage of trading using opposite Heng Leasing and KT Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heng Leasing position performs unexpectedly, KT Medical 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 KT Medical will offset losses from the drop in KT Medical's long position.| Heng Leasing vs. Bangkok Commercial Asset | Heng Leasing vs. Siam Global House | Heng Leasing vs. Dohome Public | Heng Leasing vs. JMT Network Services |
| KT Medical vs. DTC Enterprise PCL | KT Medical vs. Yong Concrete PCL | KT Medical vs. Make To Win | KT Medical vs. Aurora Design PCL |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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