Correlation Between Hwa Fong and Ama Marine
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Ama Marine 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 Hwa Fong and Ama Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and Ama Marine Public, you can compare the effects of market volatilities on Hwa Fong and Ama Marine 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 Hwa Fong with a short position of Ama Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Ama Marine.
Diversification Opportunities for Hwa Fong and Ama Marine
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hwa and Ama is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Ama Marine Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ama Marine Public and Hwa Fong 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 Hwa Fong Rubber are associated (or correlated) with Ama Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ama Marine Public has no effect on the direction of Hwa Fong i.e., Hwa Fong and Ama Marine go up and down completely randomly.
Pair Corralation between Hwa Fong and Ama Marine
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 71.36 times more return on investment than Ama Marine. However, Hwa Fong is 71.36 times more volatile than Ama Marine Public. It trades about 0.08 of its potential returns per unit of risk. Ama Marine Public is currently generating about 0.04 per unit of risk. If you would invest 429.00 in Hwa Fong Rubber on August 25, 2024 and sell it today you would lose (5.00) from holding Hwa Fong Rubber or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Ama Marine Public
Performance |
| Timeline |
| Hwa Fong Rubber |
| Ama Marine Public |
Hwa Fong and Ama Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Ama Marine
The main advantage of trading using opposite Hwa Fong and Ama Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Ama Marine 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 Ama Marine will offset losses from the drop in Ama Marine's long position.| Hwa Fong vs. SCB X Public | Hwa Fong vs. Kasikornbank Public | Hwa Fong vs. PTT Public | Hwa Fong vs. Kasikornbank Public |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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