Correlation Between Quality Houses and Heng Leasing
Can any of the company-specific risk be diversified away by investing in both Quality Houses and Heng Leasing 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 Quality Houses and Heng Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Houses Hotel and Heng Leasing Capital, you can compare the effects of market volatilities on Quality Houses and Heng Leasing 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 Quality Houses with a short position of Heng Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and Heng Leasing.
Diversification Opportunities for Quality Houses and Heng Leasing
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Quality and Heng is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Hotel and Heng Leasing Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heng Leasing Capital and Quality Houses 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 Quality Houses Hotel are associated (or correlated) with Heng Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heng Leasing Capital has no effect on the direction of Quality Houses i.e., Quality Houses and Heng Leasing go up and down completely randomly.
Pair Corralation between Quality Houses and Heng Leasing
Assuming the 90 days trading horizon Quality Houses Hotel is expected to generate 17.5 times more return on investment than Heng Leasing. However, Quality Houses is 17.5 times more volatile than Heng Leasing Capital. It trades about 0.04 of its potential returns per unit of risk. Heng Leasing Capital is currently generating about -0.06 per unit of risk. If you would invest 575.00 in Quality Houses Hotel on September 3, 2024 and sell it today you would lose (575.00) from holding Quality Houses Hotel or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Quality Houses Hotel vs. Heng Leasing Capital
Performance |
| Timeline |
| Quality Houses Hotel |
| Heng Leasing Capital |
Quality Houses and Heng Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Houses and Heng Leasing
The main advantage of trading using opposite Quality Houses and Heng Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses position performs unexpectedly, Heng Leasing 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 Heng Leasing will offset losses from the drop in Heng Leasing's long position.| Quality Houses vs. Quality Houses Property | Quality Houses vs. Land and Houses | Quality Houses vs. WHA Premium Growth | Quality Houses vs. LH Hotel Leasehold |
| Heng Leasing vs. Bangkok Commercial Asset | Heng Leasing vs. Siam Global House | Heng Leasing vs. Dohome Public | Heng Leasing vs. JMT Network Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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