Correlation Between Hsing Ta and Southeast Cement
Can any of the company-specific risk be diversified away by investing in both Hsing Ta and Southeast Cement 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 Hsing Ta and Southeast Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsing Ta Cement and Southeast Cement Co, you can compare the effects of market volatilities on Hsing Ta and Southeast Cement 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 Hsing Ta with a short position of Southeast Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsing Ta and Southeast Cement.
Diversification Opportunities for Hsing Ta and Southeast Cement
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hsing and Southeast is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hsing Ta Cement and Southeast Cement Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeast Cement and Hsing Ta 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 Hsing Ta Cement are associated (or correlated) with Southeast Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeast Cement has no effect on the direction of Hsing Ta i.e., Hsing Ta and Southeast Cement go up and down completely randomly.
Pair Corralation between Hsing Ta and Southeast Cement
Assuming the 90 days trading horizon Hsing Ta Cement is expected to generate 0.34 times more return on investment than Southeast Cement. However, Hsing Ta Cement is 2.95 times less risky than Southeast Cement. It trades about 0.43 of its potential returns per unit of risk. Southeast Cement Co is currently generating about 0.09 per unit of risk. If you would invest 1,725 in Hsing Ta Cement on December 1, 2024 and sell it today you would earn a total of 70.00 from holding Hsing Ta Cement or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsing Ta Cement vs. Southeast Cement Co
Performance |
| Timeline |
| Hsing Ta Cement |
| Southeast Cement |
Hsing Ta and Southeast Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsing Ta and Southeast Cement
The main advantage of trading using opposite Hsing Ta and Southeast Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsing Ta position performs unexpectedly, Southeast Cement 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 Southeast Cement will offset losses from the drop in Southeast Cement's long position.| Hsing Ta vs. Universal Cement Corp | Hsing Ta vs. Chia Hsin Cement | Hsing Ta vs. AGV Products Corp | Hsing Ta vs. Grand Pacific Petrochemical |
| Southeast Cement vs. Chia Hsin Cement | Southeast Cement vs. Lucky Cement Co | Southeast Cement vs. Hsing Ta Cement | Southeast Cement vs. Universal Cement Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |