Correlation Between Hsing Ta and Kung Sing
Can any of the company-specific risk be diversified away by investing in both Hsing Ta and Kung Sing 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 Kung Sing 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 Kung Sing Engineering, you can compare the effects of market volatilities on Hsing Ta and Kung Sing 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 Kung Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsing Ta and Kung Sing.
Diversification Opportunities for Hsing Ta and Kung Sing
Very weak diversification
The 3 months correlation between Hsing and Kung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hsing Ta Cement and Kung Sing Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kung Sing Engineering 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 Kung Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kung Sing Engineering has no effect on the direction of Hsing Ta i.e., Hsing Ta and Kung Sing go up and down completely randomly.
Pair Corralation between Hsing Ta and Kung Sing
Assuming the 90 days trading horizon Hsing Ta is expected to generate 3.74 times less return on investment than Kung Sing. But when comparing it to its historical volatility, Hsing Ta Cement is 4.67 times less risky than Kung Sing. It trades about 0.46 of its potential returns per unit of risk. Kung Sing Engineering is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Kung Sing Engineering on November 28, 2024 and sell it today you would earn a total of 150.00 from holding Kung Sing Engineering or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsing Ta Cement vs. Kung Sing Engineering
Performance |
| Timeline |
| Hsing Ta Cement |
| Kung Sing Engineering |
Hsing Ta and Kung Sing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsing Ta and Kung Sing
The main advantage of trading using opposite Hsing Ta and Kung Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsing Ta position performs unexpectedly, Kung Sing 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 Kung Sing will offset losses from the drop in Kung Sing'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 |
| Kung Sing vs. Chien Kuo Construction | Kung Sing vs. Kee Tai Properties | Kung Sing vs. Grand Pacific Petrochemical | Kung Sing vs. BES Engineering Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |