Correlation Between Hung Ching and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Hung Ching 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 Hung Ching and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Ching Development and Hung Sheng Construction, you can compare the effects of market volatilities on Hung Ching 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 Hung Ching with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Ching and Hung Sheng.
Diversification Opportunities for Hung Ching and Hung Sheng
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and Hung is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hung Ching Development 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 Hung Ching 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 Hung Ching Development 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 Hung Ching i.e., Hung Ching and Hung Sheng go up and down completely randomly.
Pair Corralation between Hung Ching and Hung Sheng
Assuming the 90 days trading horizon Hung Ching Development is expected to generate 1.65 times more return on investment than Hung Sheng. However, Hung Ching is 1.65 times more volatile than Hung Sheng Construction. It trades about 0.06 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.07 per unit of risk. If you would invest 2,810 in Hung Ching Development on September 4, 2024 and sell it today you would earn a total of 1,055 from holding Hung Ching Development or generate 37.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Ching Development vs. Hung Sheng Construction
Performance |
| Timeline |
| Hung Ching Development |
| Hung Sheng Construction |
Hung Ching and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Ching and Hung Sheng
The main advantage of trading using opposite Hung Ching and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Ching 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.| Hung Ching vs. Hung Sheng Construction | Hung Ching vs. Kindom Construction Corp | Hung Ching vs. Kee Tai Properties | Hung Ching vs. Delpha Construction Co |
| Hung Sheng vs. Huaku Development Co | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. Taiwan Cement Corp | Hung Sheng vs. Symtek Automation Asia |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |