Correlation Between DV8 Public and UOB Kay

Can any of the company-specific risk be diversified away by investing in both DV8 Public and UOB Kay 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 DV8 Public and UOB Kay into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DV8 Public and UOB Kay Hian, you can compare the effects of market volatilities on DV8 Public and UOB Kay 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 DV8 Public with a short position of UOB Kay. Check out your portfolio center. Please also check ongoing floating volatility patterns of DV8 Public and UOB Kay.

Diversification Opportunities for DV8 Public and UOB Kay

0.58

Correlation Coefficient

DV8 Public  UOB Kay

Very weak diversification

The 3 months correlation between DV8 and UOB is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DV8 Public and UOB Kay Hian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOB Kay Hian and DV8 Public 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 DV8 Public are associated (or correlated) with UOB Kay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOB Kay Hian has no effect on the direction of DV8 Public i.e., DV8 Public and UOB Kay go up and down completely randomly.

Pair Corralation between DV8 Public and UOB Kay

Assuming the 90 days trading horizon DV8 Public is expected to under-perform the UOB Kay. In addition to that, DV8 Public is 1.1 times more volatile than UOB Kay Hian. It trades about -0.09 of its total potential returns per unit of risk. UOB Kay Hian is currently generating about 0.0 per unit of volatility. If you would invest  535.00  in UOB Kay Hian on December 19, 2024 and sell it today you would lose (25.00) from holding UOB Kay Hian or give up 4.67% of portfolio value over 90 days.

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

DV8 Public  vs.  UOB Kay Hian

DV8 Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days DV8 Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

UOB Kay Hian

Risk-Adjusted Performance

Very Weak

Over the last 90 days UOB Kay Hian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, UOB Kay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DV8 Public and UOB Kay

The main advantage of trading using opposite DV8 Public and UOB Kay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DV8 Public position performs unexpectedly, UOB Kay 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 UOB Kay will offset losses from the drop in UOB Kay's long position.

The idea behind DV8 Public and UOB Kay Hian 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.