Correlation Between Heng Leasing and Quality Houses
Can any of the company-specific risk be diversified away by investing in both Heng Leasing and Quality Houses 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 Quality Houses 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 Quality Houses Property, you can compare the effects of market volatilities on Heng Leasing and Quality Houses 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 Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heng Leasing and Quality Houses.
Diversification Opportunities for Heng Leasing and Quality Houses
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heng and Quality is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Heng Leasing Capital and Quality Houses Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Property 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 Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Property has no effect on the direction of Heng Leasing i.e., Heng Leasing and Quality Houses go up and down completely randomly.
Pair Corralation between Heng Leasing and Quality Houses
Assuming the 90 days trading horizon Heng Leasing Capital is expected to under-perform the Quality Houses. In addition to that, Heng Leasing is 1.4 times more volatile than Quality Houses Property. It trades about -0.06 of its total potential returns per unit of risk. Quality Houses Property is currently generating about -0.04 per unit of volatility. If you would invest 728.00 in Quality Houses Property on September 3, 2024 and sell it today you would lose (254.00) from holding Quality Houses Property or give up 34.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Heng Leasing Capital vs. Quality Houses Property
Performance |
| Timeline |
| Heng Leasing Capital |
| Quality Houses Property |
Heng Leasing and Quality Houses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heng Leasing and Quality Houses
The main advantage of trading using opposite Heng Leasing and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heng Leasing position performs unexpectedly, Quality Houses 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 Quality Houses will offset losses from the drop in Quality Houses' 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 |
| Quality Houses vs. Quality Houses Hotel | Quality Houses vs. LH Shopping Centers | Quality Houses vs. LH Hotel Leasehold | Quality Houses vs. Future Park Leasehold |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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