Correlation Between VGI Public and Chin Huay

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

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

Diversification Opportunities for VGI Public and Chin Huay

0.47

Correlation Coefficient

VGI Public  Chin Huay

Very weak diversification

The 3 months correlation between VGI and Chin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Chin Huay PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Huay PCL and VGI 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 VGI Public are associated (or correlated) with Chin Huay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Huay PCL has no effect on the direction of VGI Public i.e., VGI Public and Chin Huay go up and down completely randomly.

Pair Corralation between VGI Public and Chin Huay

Assuming the 90 days trading horizon VGI Public is expected to under-perform the Chin Huay. In addition to that, VGI Public is 3.57 times more volatile than Chin Huay PCL. It trades about -0.03 of its total potential returns per unit of risk. Chin Huay PCL is currently generating about 0.05 per unit of volatility. If you would invest  200.00  in Chin Huay PCL on December 27, 2024 and sell it today you would earn a total of  6.00  from holding Chin Huay PCL or generate 3.0% return on investment over 90 days.

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

VGI Public  vs.  Chin Huay PCL

VGI Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days VGI Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Chin Huay PCL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chin Huay PCL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Chin Huay is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with VGI Public and Chin Huay

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

The idea behind VGI Public and Chin Huay PCL 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.