Correlation Between AGV Products and Hsing Ta
Can any of the company-specific risk be diversified away by investing in both AGV Products and Hsing Ta 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 AGV Products and Hsing Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGV Products Corp and Hsing Ta Cement, you can compare the effects of market volatilities on AGV Products and Hsing Ta 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 AGV Products with a short position of Hsing Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGV Products and Hsing Ta.
Diversification Opportunities for AGV Products and Hsing Ta
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AGV and Hsing is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AGV Products Corp and Hsing Ta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsing Ta Cement and AGV Products 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 AGV Products Corp are associated (or correlated) with Hsing Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsing Ta Cement has no effect on the direction of AGV Products i.e., AGV Products and Hsing Ta go up and down completely randomly.
Pair Corralation between AGV Products and Hsing Ta
Assuming the 90 days trading horizon AGV Products Corp is expected to generate 1.25 times more return on investment than Hsing Ta. However, AGV Products is 1.25 times more volatile than Hsing Ta Cement. It trades about -0.01 of its potential returns per unit of risk. Hsing Ta Cement is currently generating about -0.04 per unit of risk. If you would invest 1,220 in AGV Products Corp on September 1, 2024 and sell it today you would lose (30.00) from holding AGV Products Corp or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
AGV Products Corp vs. Hsing Ta Cement
Performance |
| Timeline |
| AGV Products Corp |
| Hsing Ta Cement |
AGV Products and Hsing Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGV Products and Hsing Ta
The main advantage of trading using opposite AGV Products and Hsing Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGV Products position performs unexpectedly, Hsing Ta 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 Hsing Ta will offset losses from the drop in Hsing Ta's long position.| AGV Products vs. De Licacy Industrial | AGV Products vs. Wisher Industrial Co | AGV Products vs. Tainan Enterprises Co |
| Hsing Ta vs. Universal Cement Corp | Hsing Ta vs. Chia Hsin Cement | Hsing Ta vs. AGV Products Corp | Hsing Ta 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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