Correlation Between EA Technique and Homeritz Bhd

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Can any of the company-specific risk be diversified away by investing in both EA Technique and Homeritz Bhd 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 EA Technique and Homeritz Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Technique M and Homeritz Bhd, you can compare the effects of market volatilities on EA Technique and Homeritz Bhd 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 EA Technique with a short position of Homeritz Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Homeritz Bhd.

Diversification Opportunities for EA Technique and Homeritz Bhd

5259HomeritzDiversified Away5259HomeritzDiversified Away100%
0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 5259 and Homeritz is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M and Homeritz Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homeritz Bhd and EA Technique 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 EA Technique M are associated (or correlated) with Homeritz Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homeritz Bhd has no effect on the direction of EA Technique i.e., EA Technique and Homeritz Bhd go up and down completely randomly.

Pair Corralation between EA Technique and Homeritz Bhd

Assuming the 90 days trading horizon EA Technique is expected to generate 2.08 times less return on investment than Homeritz Bhd. In addition to that, EA Technique is 1.55 times more volatile than Homeritz Bhd. It trades about 0.06 of its total potential returns per unit of risk. Homeritz Bhd is currently generating about 0.19 per unit of volatility. If you would invest  53.00  in Homeritz Bhd on October 27, 2024 and sell it today you would earn a total of  9.00  from holding Homeritz Bhd or generate 16.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

EA Technique M  vs.  Homeritz Bhd

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0510
JavaScript chart by amCharts 3.21.155259 5160
       Timeline  
EA Technique M 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in EA Technique M are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, EA Technique may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.280.290.30.310.320.33
Homeritz Bhd 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Homeritz Bhd are ranked lower than 15 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.530.540.550.560.570.580.590.60.610.62

EA Technique and Homeritz Bhd Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.42-4.81-3.2-1.580.02771.663.324.986.64 0.050.100.150.20
JavaScript chart by amCharts 3.21.155259 5160
       Returns  

Pair Trading with EA Technique and Homeritz Bhd

The main advantage of trading using opposite EA Technique and Homeritz Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Technique position performs unexpectedly, Homeritz Bhd 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 Homeritz Bhd will offset losses from the drop in Homeritz Bhd's long position.
The idea behind EA Technique M and Homeritz 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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