Correlation Between Hsin Yung and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both Hsin Yung and Pontex Polyblend 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 Hsin Yung and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsin Yung Chien and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Hsin Yung and Pontex Polyblend 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 Hsin Yung with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Yung and Pontex Polyblend.
Diversification Opportunities for Hsin Yung and Pontex Polyblend
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hsin and Pontex is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Yung Chien and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Hsin Yung 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 Hsin Yung Chien are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Hsin Yung i.e., Hsin Yung and Pontex Polyblend go up and down completely randomly.
Pair Corralation between Hsin Yung and Pontex Polyblend
Assuming the 90 days trading horizon Hsin Yung Chien is expected to under-perform the Pontex Polyblend. But the stock apears to be less risky and, when comparing its historical volatility, Hsin Yung Chien is 3.19 times less risky than Pontex Polyblend. The stock trades about -0.06 of its potential returns per unit of risk. The Pontex Polyblend CoLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,247 in Pontex Polyblend CoLtd on August 31, 2024 and sell it today you would earn a total of 953.00 from holding Pontex Polyblend CoLtd or generate 76.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsin Yung Chien vs. Pontex Polyblend CoLtd
Performance |
| Timeline |
| Hsin Yung Chien |
| Pontex Polyblend CoLtd |
Hsin Yung and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsin Yung and Pontex Polyblend
The main advantage of trading using opposite Hsin Yung and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsin Yung position performs unexpectedly, Pontex Polyblend 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 Pontex Polyblend will offset losses from the drop in Pontex Polyblend's long position.| Hsin Yung vs. BES Engineering Co | Hsin Yung vs. Continental Holdings Corp | Hsin Yung vs. Kee Tai Properties | Hsin Yung vs. Hung Sheng Construction |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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