Correlation Between Yong Concrete and Heng Leasing
Can any of the company-specific risk be diversified away by investing in both Yong Concrete 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 Yong Concrete and Heng Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yong Concrete PCL and Heng Leasing Capital, you can compare the effects of market volatilities on Yong Concrete 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 Yong Concrete with a short position of Heng Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Concrete and Heng Leasing.
Diversification Opportunities for Yong Concrete and Heng Leasing
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yong and Heng is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Yong Concrete PCL 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 Yong Concrete 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 Yong Concrete PCL 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 Yong Concrete i.e., Yong Concrete and Heng Leasing go up and down completely randomly.
Pair Corralation between Yong Concrete and Heng Leasing
Assuming the 90 days trading horizon Yong Concrete PCL is expected to under-perform the Heng Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Yong Concrete PCL is 1.31 times less risky than Heng Leasing. The stock trades about -0.12 of its potential returns per unit of risk. The Heng Leasing Capital is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Heng Leasing Capital on September 1, 2024 and sell it today you would lose (18.00) from holding Heng Leasing Capital or give up 13.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Yong Concrete PCL vs. Heng Leasing Capital
Performance |
| Timeline |
| Yong Concrete PCL |
| Heng Leasing Capital |
Yong Concrete and Heng Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Concrete and Heng Leasing
The main advantage of trading using opposite Yong Concrete and Heng Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Concrete 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.| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group Public |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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