Correlation Between Hsing Ta and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Hsing Ta and Asia Polymer 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 Asia Polymer 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 Asia Polymer Corp, you can compare the effects of market volatilities on Hsing Ta and Asia Polymer 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 Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsing Ta and Asia Polymer.
Diversification Opportunities for Hsing Ta and Asia Polymer
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hsing and Asia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hsing Ta Cement and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp 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 Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Hsing Ta i.e., Hsing Ta and Asia Polymer go up and down completely randomly.
Pair Corralation between Hsing Ta and Asia Polymer
Assuming the 90 days trading horizon Hsing Ta Cement is expected to generate 0.14 times more return on investment than Asia Polymer. However, Hsing Ta Cement is 7.09 times less risky than Asia Polymer. It trades about -0.05 of its potential returns per unit of risk. Asia Polymer Corp is currently generating about -0.01 per unit of risk. If you would invest 1,845 in Hsing Ta Cement on September 1, 2024 and sell it today you would lose (10.00) from holding Hsing Ta Cement or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hsing Ta Cement vs. Asia Polymer Corp
Performance |
| Timeline |
| Hsing Ta Cement |
| Asia Polymer Corp |
Hsing Ta and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsing Ta and Asia Polymer
The main advantage of trading using opposite Hsing Ta and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsing Ta position performs unexpectedly, Asia Polymer 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 Asia Polymer will offset losses from the drop in Asia Polymer'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 |
| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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