Correlation Between HeiTech Padu and Dataprep Holdings

Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and Dataprep Holdings 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 HeiTech Padu and Dataprep Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HeiTech Padu Bhd and Dataprep Holdings Bhd, you can compare the effects of market volatilities on HeiTech Padu and Dataprep Holdings 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 HeiTech Padu with a short position of Dataprep Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and Dataprep Holdings.

Diversification Opportunities for HeiTech Padu and Dataprep Holdings

-0.51

Correlation Coefficient

HeiTech Padu  Dataprep Holdings

Excellent diversification

The 3 months correlation between HeiTech and Dataprep is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and Dataprep Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataprep Holdings Bhd and HeiTech Padu 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 HeiTech Padu Bhd are associated (or correlated) with Dataprep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataprep Holdings Bhd has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and Dataprep Holdings go up and down completely randomly.

Pair Corralation between HeiTech Padu and Dataprep Holdings

Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to generate 0.83 times more return on investment than Dataprep Holdings. However, HeiTech Padu Bhd is 1.2 times less risky than Dataprep Holdings. It trades about 0.03 of its potential returns per unit of risk. Dataprep Holdings Bhd is currently generating about -0.04 per unit of risk. If you would invest  299.00  in HeiTech Padu Bhd on September 15, 2024 and sell it today you would earn a total of  10.00  from holding HeiTech Padu Bhd or generate 3.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

HeiTech Padu Bhd  vs.  Dataprep Holdings Bhd

HeiTech Padu Bhd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HeiTech Padu Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, HeiTech Padu may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dataprep Holdings Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dataprep Holdings Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with HeiTech Padu and Dataprep Holdings

The main advantage of trading using opposite HeiTech Padu and Dataprep Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeiTech Padu position performs unexpectedly, Dataprep Holdings 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 Dataprep Holdings will offset losses from the drop in Dataprep Holdings' long position.

The idea behind HeiTech Padu Bhd and Dataprep Holdings Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.