Correlation Between Hwa Fong and Country Group
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Country Group 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 Country Group 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 Country Group Holdings, you can compare the effects of market volatilities on Hwa Fong and Country Group 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 Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Country Group.
Diversification Opportunities for Hwa Fong and Country Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hwa and Country is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of Hwa Fong i.e., Hwa Fong and Country Group go up and down completely randomly.
Pair Corralation between Hwa Fong and Country Group
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to under-perform the Country Group. In addition to that, Hwa Fong is 1.09 times more volatile than Country Group Holdings. It trades about -0.26 of its total potential returns per unit of risk. Country Group Holdings is currently generating about 0.01 per unit of volatility. If you would invest 68.00 in Country Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Country Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Country Group Holdings
Performance |
| Timeline |
| Hwa Fong Rubber |
| Country Group Holdings |
Hwa Fong and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Country Group
The main advantage of trading using opposite Hwa Fong and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Country Group 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 Country Group will offset losses from the drop in Country Group's long position.| Hwa Fong vs. TRC Construction Public | Hwa Fong vs. Bangkok Expressway and | Hwa Fong vs. Lohakit Metal Public | Hwa Fong vs. Gunkul Engineering Public |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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