Correlation Between Homeritz Bhd and OpenSys M

Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd and OpenSys M 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 Homeritz Bhd and OpenSys M into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Homeritz Bhd and OpenSys M

0.0

Correlation Coefficient

Homeritz Bhd  OpenSys M

Pay attention - limited upside

The 3 months correlation between Homeritz and OpenSys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd and OpenSys M Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OpenSys M Bhd and Homeritz Bhd 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 Homeritz Bhd are associated (or correlated) with OpenSys M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OpenSys M Bhd has no effect on the direction of Homeritz Bhd i.e., Homeritz Bhd and OpenSys M go up and down completely randomly.

Pair Corralation between Homeritz Bhd and OpenSys M

If you would invest  57.00  in Homeritz Bhd on October 25, 2024 and sell it today you would earn a total of  3.00  from holding Homeritz Bhd or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Homeritz Bhd  vs.  OpenSys M Bhd

Homeritz Bhd

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Homeritz Bhd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Homeritz Bhd disclosed solid returns over the last few months and may actually be approaching a breakup point.

OpenSys M Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OpenSys M Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, OpenSys M is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Homeritz Bhd and OpenSys M

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

The idea behind Homeritz Bhd and OpenSys M 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.