Correlation Between Hua Hong and Keck Seng
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Keck Seng 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 Hua Hong and Keck Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Keck Seng Investments, you can compare the effects of market volatilities on Hua Hong and Keck Seng 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 Hua Hong with a short position of Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Keck Seng.
Diversification Opportunities for Hua Hong and Keck Seng
Poor diversification
The 3 months correlation between Hua and Keck is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of Hua Hong i.e., Hua Hong and Keck Seng go up and down completely randomly.
Pair Corralation between Hua Hong and Keck Seng
Assuming the 90 days horizon Hua Hong Semiconductor is expected to under-perform the Keck Seng. But the stock apears to be less risky and, when comparing its historical volatility, Hua Hong Semiconductor is 1.53 times less risky than Keck Seng. The stock trades about -0.26 of its potential returns per unit of risk. The Keck Seng Investments is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Keck Seng Investments on December 25, 2024 and sell it today you would lose (1.00) from holding Keck Seng Investments or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Keck Seng Investments
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Keck Seng Investments |
Hua Hong and Keck Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Keck Seng
The main advantage of trading using opposite Hua Hong and Keck Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Keck Seng 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 Keck Seng will offset losses from the drop in Keck Seng's long position.| Hua Hong vs. FIREWEED METALS P | Hua Hong vs. Stag Industrial | Hua Hong vs. ARDAGH METAL PACDL 0001 | Hua Hong vs. IBU tec advanced materials |
| Keck Seng vs. G5 Entertainment AB | Keck Seng vs. AFRICAN MEDIA ENT | Keck Seng vs. PROSIEBENSAT1 MEDIADR4 | Keck Seng vs. Tencent Music Entertainment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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