Correlation Between Hwa Fong and Globlex Holding
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Globlex Holding 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 Globlex Holding 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 Globlex Holding Management, you can compare the effects of market volatilities on Hwa Fong and Globlex Holding 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 Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Globlex Holding.
Diversification Opportunities for Hwa Fong and Globlex Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hwa and Globlex is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana 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 Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of Hwa Fong i.e., Hwa Fong and Globlex Holding go up and down completely randomly.
Pair Corralation between Hwa Fong and Globlex Holding
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 1.0 times more return on investment than Globlex Holding. However, Hwa Fong is 1.0 times more volatile than Globlex Holding Management. It trades about 0.06 of its potential returns per unit of risk. Globlex Holding Management is currently generating about 0.06 per unit of risk. If you would invest 411.00 in Hwa Fong Rubber on October 22, 2024 and sell it today you would earn a total of 15.00 from holding Hwa Fong Rubber or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.54% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Globlex Holding Management
Performance |
| Timeline |
| Hwa Fong Rubber |
| Globlex Holding Mana |
Hwa Fong and Globlex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Globlex Holding
The main advantage of trading using opposite Hwa Fong and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Globlex Holding 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 Globlex Holding will offset losses from the drop in Globlex Holding's long position.| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
| Globlex Holding vs. Asia Plus Group | Globlex Holding vs. Eastern Commercial Leasing | Globlex Holding vs. Country Group Holdings | Globlex Holding vs. EMC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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