Correlation Between Hwa Fong and SPCG Public
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and SPCG Public 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 SPCG Public 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 SPCG Public, you can compare the effects of market volatilities on Hwa Fong and SPCG Public 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 SPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and SPCG Public.
Diversification Opportunities for Hwa Fong and SPCG Public
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hwa and SPCG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and SPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPCG 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 SPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPCG Public has no effect on the direction of Hwa Fong i.e., Hwa Fong and SPCG Public go up and down completely randomly.
Pair Corralation between Hwa Fong and SPCG Public
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 56.64 times more return on investment than SPCG Public. However, Hwa Fong is 56.64 times more volatile than SPCG Public. It trades about 0.08 of its potential returns per unit of risk. SPCG Public is currently generating about -0.02 per unit of risk. If you would invest 431.00 in Hwa Fong Rubber on September 1, 2024 and sell it today you would lose (7.00) from holding Hwa Fong Rubber or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hwa Fong Rubber vs. SPCG Public
Performance |
| Timeline |
| Hwa Fong Rubber |
| SPCG Public |
Hwa Fong and SPCG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and SPCG Public
The main advantage of trading using opposite Hwa Fong and SPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, SPCG Public 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 SPCG Public will offset losses from the drop in SPCG Public'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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