Correlation Between Zeng Hsing and Heran
Can any of the company-specific risk be diversified away by investing in both Zeng Hsing and Heran 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 Zeng Hsing and Heran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeng Hsing Industrial and Heran Co, you can compare the effects of market volatilities on Zeng Hsing and Heran 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 Zeng Hsing with a short position of Heran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeng Hsing and Heran.
Diversification Opportunities for Zeng Hsing and Heran
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zeng and Heran is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zeng Hsing Industrial and Heran Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heran and Zeng Hsing 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 Zeng Hsing Industrial are associated (or correlated) with Heran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heran has no effect on the direction of Zeng Hsing i.e., Zeng Hsing and Heran go up and down completely randomly.
Pair Corralation between Zeng Hsing and Heran
Assuming the 90 days trading horizon Zeng Hsing Industrial is expected to generate 1.88 times more return on investment than Heran. However, Zeng Hsing is 1.88 times more volatile than Heran Co. It trades about 0.06 of its potential returns per unit of risk. Heran Co is currently generating about 0.03 per unit of risk. If you would invest 9,674 in Zeng Hsing Industrial on October 25, 2024 and sell it today you would earn a total of 926.00 from holding Zeng Hsing Industrial or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zeng Hsing Industrial vs. Heran Co
Performance |
| Timeline |
| Zeng Hsing Industrial |
| Heran |
Zeng Hsing and Heran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeng Hsing and Heran
The main advantage of trading using opposite Zeng Hsing and Heran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeng Hsing position performs unexpectedly, Heran 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 Heran will offset losses from the drop in Heran's long position.| Zeng Hsing vs. TTET Union Corp | Zeng Hsing vs. Shinkong Insurance Co | Zeng Hsing vs. Huaku Development Co | Zeng Hsing vs. China Steel Chemical |
| Heran vs. Chicony Power Technology | Heran vs. Coretronic | Heran vs. Merry Electronics Co | Heran vs. Sampo 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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