Correlation Between Hsing Ta and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Hsing Ta and Goldsun Building 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 Goldsun Building 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 Goldsun Building Materials, you can compare the effects of market volatilities on Hsing Ta and Goldsun Building 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 Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsing Ta and Goldsun Building.
Diversification Opportunities for Hsing Ta and Goldsun Building
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hsing and Goldsun is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hsing Ta Cement and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat 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 Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Hsing Ta i.e., Hsing Ta and Goldsun Building go up and down completely randomly.
Pair Corralation between Hsing Ta and Goldsun Building
Assuming the 90 days trading horizon Hsing Ta Cement is expected to under-perform the Goldsun Building. But the stock apears to be less risky and, when comparing its historical volatility, Hsing Ta Cement is 2.27 times less risky than Goldsun Building. The stock trades about -0.04 of its potential returns per unit of risk. The Goldsun Building Materials is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,610 in Goldsun Building Materials on September 1, 2024 and sell it today you would earn a total of 790.00 from holding Goldsun Building Materials or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Hsing Ta Cement vs. Goldsun Building Materials
Performance |
| Timeline |
| Hsing Ta Cement |
| Goldsun Building Mat |
Hsing Ta and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsing Ta and Goldsun Building
The main advantage of trading using opposite Hsing Ta and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsing Ta position performs unexpectedly, Goldsun Building 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 Goldsun Building will offset losses from the drop in Goldsun Building'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 |
| Goldsun Building vs. Basso Industry Corp | Goldsun Building vs. Chung Hsin Electric Machinery | Goldsun Building vs. TYC Brother Industrial | Goldsun Building vs. TECO Electric Machinery |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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