Correlation Between TPI Polene and Heng Leasing
Can any of the company-specific risk be diversified away by investing in both TPI Polene 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 TPI Polene and Heng Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPI Polene Power and Heng Leasing Capital, you can compare the effects of market volatilities on TPI Polene 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 TPI Polene with a short position of Heng Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Heng Leasing.
Diversification Opportunities for TPI Polene and Heng Leasing
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TPI and Heng is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Power 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 TPI Polene 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 TPI Polene Power 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 TPI Polene i.e., TPI Polene and Heng Leasing go up and down completely randomly.
Pair Corralation between TPI Polene and Heng Leasing
Assuming the 90 days trading horizon TPI Polene Power is expected to generate 0.31 times more return on investment than Heng Leasing. However, TPI Polene Power is 3.22 times less risky than Heng Leasing. It trades about 0.01 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 286.00 in TPI Polene Power on August 29, 2024 and sell it today you would earn a total of 12.00 from holding TPI Polene Power or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Power vs. Heng Leasing Capital
Performance |
| Timeline |
| TPI Polene Power |
| Heng Leasing Capital |
TPI Polene and Heng Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Heng Leasing
The main advantage of trading using opposite TPI Polene and Heng Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene 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.| TPI Polene vs. Ratch Group Public | TPI Polene vs. BCPG Public | TPI Polene vs. Gulf Energy Development | TPI Polene vs. BTS Group Holdings |
| Heng Leasing vs. Amanah Leasing Public | Heng Leasing vs. Infraset 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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