Correlation Between Samart Public and Hwa Fong

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

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

Diversification Opportunities for Samart Public and Hwa Fong

-0.29

Correlation Coefficient

Samart Public  Hwa Fong

Very good diversification

The 3 months correlation between Samart and Hwa is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samart Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Samart 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 Samart Public are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Samart Public i.e., Samart Public and Hwa Fong go up and down completely randomly.

Pair Corralation between Samart Public and Hwa Fong

Assuming the 90 days trading horizon Samart Public is expected to under-perform the Hwa Fong. In addition to that, Samart Public is 1.92 times more volatile than Hwa Fong Rubber. It trades about -0.04 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about 0.24 per unit of volatility. If you would invest  362.00  in Hwa Fong Rubber on April 23, 2025 and sell it today you would earn a total of  54.00  from holding Hwa Fong Rubber or generate 14.92% return on investment over 90 days.

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

Samart Public  vs.  Hwa Fong Rubber

Samart Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Samart Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hwa Fong Rubber

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hwa Fong Rubber are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Hwa Fong disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samart Public and Hwa Fong

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

The idea behind Samart Public and Hwa Fong Rubber 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.