Correlation Between Heng Leasing and NAT ABSOLUTE
Can any of the company-specific risk be diversified away by investing in both Heng Leasing and NAT ABSOLUTE 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 NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES, you can compare the effects of market volatilities on Heng Leasing and NAT ABSOLUTE 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 NAT ABSOLUTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heng Leasing and NAT ABSOLUTE.
Diversification Opportunities for Heng Leasing and NAT ABSOLUTE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heng and NAT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Heng Leasing Capital and NAT ABSOLUTE TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAT ABSOLUTE TECHNOLOGIES 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 NAT ABSOLUTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAT ABSOLUTE TECHNOLOGIES has no effect on the direction of Heng Leasing i.e., Heng Leasing and NAT ABSOLUTE go up and down completely randomly.
Pair Corralation between Heng Leasing and NAT ABSOLUTE
Assuming the 90 days trading horizon Heng Leasing Capital is expected to generate 0.75 times more return on investment than NAT ABSOLUTE. However, Heng Leasing Capital is 1.33 times less risky than NAT ABSOLUTE. It trades about -0.05 of its potential returns per unit of risk. NAT ABSOLUTE TECHNOLOGIES is currently generating about -0.04 per unit of risk. If you would invest 270.00 in Heng Leasing Capital on December 1, 2024 and sell it today you would lose (156.00) from holding Heng Leasing Capital or give up 57.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.71% |
| Values | Daily Returns |
Heng Leasing Capital vs. NAT ABSOLUTE TECHNOLOGIES
Performance |
| Timeline |
| Heng Leasing Capital |
| NAT ABSOLUTE TECHNOLOGIES |
Heng Leasing and NAT ABSOLUTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heng Leasing and NAT ABSOLUTE
The main advantage of trading using opposite Heng Leasing and NAT ABSOLUTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heng Leasing position performs unexpectedly, NAT ABSOLUTE 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 NAT ABSOLUTE will offset losses from the drop in NAT ABSOLUTE'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 |
| NAT ABSOLUTE vs. Earth Tech Environment | NAT ABSOLUTE vs. Sriracha Construction Public | NAT ABSOLUTE vs. City Steel Public | NAT ABSOLUTE vs. General Environmental Conservation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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