Correlation Between Dataprep Holdings and Teo Seng

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

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

Diversification Opportunities for Dataprep Holdings and Teo Seng

0.42

Correlation Coefficient

Dataprep Holdings  Teo Seng

Very weak diversification

The 3 months correlation between Dataprep and Teo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dataprep Holdings Bhd and Teo Seng Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teo Seng Capital and Dataprep Holdings 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 Dataprep Holdings Bhd are associated (or correlated) with Teo Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teo Seng Capital has no effect on the direction of Dataprep Holdings i.e., Dataprep Holdings and Teo Seng go up and down completely randomly.

Pair Corralation between Dataprep Holdings and Teo Seng

Assuming the 90 days trading horizon Dataprep Holdings Bhd is expected to under-perform the Teo Seng. In addition to that, Dataprep Holdings is 2.2 times more volatile than Teo Seng Capital. It trades about -0.18 of its total potential returns per unit of risk. Teo Seng Capital is currently generating about -0.25 per unit of volatility. If you would invest  117.00  in Teo Seng Capital on October 8, 2024 and sell it today you would lose (9.00) from holding Teo Seng Capital or give up 7.69% of portfolio value over 90 days.

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

Dataprep Holdings Bhd  vs.  Teo Seng Capital

Dataprep Holdings Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dataprep Holdings Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Dataprep Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Teo Seng Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teo Seng Capital 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 Dataprep Holdings and Teo Seng

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

The idea behind Dataprep Holdings Bhd and Teo Seng Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.