Correlation Between Taiwan Cement and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Taiwan Cement and Hung Sheng 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 Taiwan Cement and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Cement Corp and Hung Sheng Construction, you can compare the effects of market volatilities on Taiwan Cement and Hung Sheng 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 Taiwan Cement with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cement and Hung Sheng.
Diversification Opportunities for Taiwan Cement and Hung Sheng
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiwan and Hung is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cement Corp and Hung Sheng Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Sheng Construction and Taiwan Cement 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 Taiwan Cement Corp are associated (or correlated) with Hung Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Sheng Construction has no effect on the direction of Taiwan Cement i.e., Taiwan Cement and Hung Sheng go up and down completely randomly.
Pair Corralation between Taiwan Cement and Hung Sheng
Assuming the 90 days trading horizon Taiwan Cement Corp is expected to generate 0.5 times more return on investment than Hung Sheng. However, Taiwan Cement Corp is 2.02 times less risky than Hung Sheng. It trades about 0.02 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about -0.02 per unit of risk. If you would invest 3,300 in Taiwan Cement Corp on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Taiwan Cement Corp or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Cement Corp vs. Hung Sheng Construction
Performance |
| Timeline |
| Taiwan Cement Corp |
| Hung Sheng Construction |
Taiwan Cement and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cement and Hung Sheng
The main advantage of trading using opposite Taiwan Cement and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cement position performs unexpectedly, Hung Sheng 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 Hung Sheng will offset losses from the drop in Hung Sheng's long position.| Taiwan Cement vs. Asia Cement Corp | Taiwan Cement vs. Formosa Plastics Corp | Taiwan Cement vs. Nan Ya Plastics | Taiwan Cement vs. China Steel Corp |
| Hung Sheng vs. Huaku Development Co | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. Taiwan Cement Corp | Hung Sheng vs. Symtek Automation Asia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |