Correlation Between Sunspring Metal and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Sunspring Metal and Hung Sheng 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 Sunspring Metal and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunspring Metal Corp and Hung Sheng Construction, you can compare the effects of market volatilities on Sunspring Metal and Hung Sheng 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 Sunspring Metal with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunspring Metal and Hung Sheng.
Diversification Opportunities for Sunspring Metal and Hung Sheng
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunspring and Hung is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sunspring Metal Corp and Hung Sheng Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Sheng Construction and Sunspring Metal 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 Sunspring Metal Corp are associated (or correlated) with Hung Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Sheng Construction has no effect on the direction of Sunspring Metal i.e., Sunspring Metal and Hung Sheng go up and down completely randomly.
Pair Corralation between Sunspring Metal and Hung Sheng
Assuming the 90 days trading horizon Sunspring Metal is expected to generate 8.56 times less return on investment than Hung Sheng. In addition to that, Sunspring Metal is 1.69 times more volatile than Hung Sheng Construction. It trades about 0.01 of its total potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.09 per unit of volatility. If you would invest 2,615 in Hung Sheng Construction on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Hung Sheng Construction or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunspring Metal Corp vs. Hung Sheng Construction
Performance |
| Timeline |
| Sunspring Metal Corp |
| Hung Sheng Construction |
Sunspring Metal and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunspring Metal and Hung Sheng
The main advantage of trading using opposite Sunspring Metal and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunspring Metal position performs unexpectedly, Hung Sheng 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 Hung Sheng will offset losses from the drop in Hung Sheng's long position.| Sunspring Metal vs. Makalot Industrial Co | Sunspring Metal vs. Eternal Materials Co | Sunspring Metal vs. Feng Tay Enterprises | Sunspring Metal vs. Taiwan Fu Hsing |
| Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. CTCI Corp | Hung Sheng vs. Information Technology Total | Hung Sheng vs. Ennoconn 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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