Correlation Between HeiTech Padu and Aurelius Technologies

Can any of the company-specific risk be diversified away by investing in both HeiTech Padu and Aurelius Technologies 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 Aurelius Technologies 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 Aurelius Technologies Bhd, you can compare the effects of market volatilities on HeiTech Padu and Aurelius Technologies 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 Aurelius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeiTech Padu and Aurelius Technologies.

Diversification Opportunities for HeiTech Padu and Aurelius Technologies

0.67

Correlation Coefficient

HeiTech Padu  Aurelius Technologies

Poor diversification

The 3 months correlation between HeiTech and Aurelius is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding HeiTech Padu Bhd and Aurelius Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius Technologies 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 Aurelius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Technologies Bhd has no effect on the direction of HeiTech Padu i.e., HeiTech Padu and Aurelius Technologies go up and down completely randomly.

Pair Corralation between HeiTech Padu and Aurelius Technologies

Assuming the 90 days trading horizon HeiTech Padu Bhd is expected to under-perform the Aurelius Technologies. In addition to that, HeiTech Padu is 1.23 times more volatile than Aurelius Technologies Bhd. It trades about -0.2 of its total potential returns per unit of risk. Aurelius Technologies Bhd is currently generating about -0.06 per unit of volatility. If you would invest  347.00  in Aurelius Technologies Bhd on December 30, 2024 and sell it today you would lose (30.00) from holding Aurelius Technologies Bhd or give up 8.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

HeiTech Padu Bhd  vs.  Aurelius Technologies Bhd

HeiTech Padu Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days HeiTech Padu Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aurelius Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aurelius Technologies 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 Aurelius Technologies

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

The idea behind HeiTech Padu Bhd and Aurelius Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..