Correlation Between Hung Ching and Shining Building
Can any of the company-specific risk be diversified away by investing in both Hung Ching and Shining Building 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 Shining Building 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 Shining Building Business, you can compare the effects of market volatilities on Hung Ching and Shining Building 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 Shining Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Ching and Shining Building.
Diversification Opportunities for Hung Ching and Shining Building
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and Shining is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hung Ching Development and Shining Building Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shining Building Business 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 Shining Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shining Building Business has no effect on the direction of Hung Ching i.e., Hung Ching and Shining Building go up and down completely randomly.
Pair Corralation between Hung Ching and Shining Building
Assuming the 90 days trading horizon Hung Ching Development is expected to under-perform the Shining Building. In addition to that, Hung Ching is 1.58 times more volatile than Shining Building Business. It trades about -0.22 of its total potential returns per unit of risk. Shining Building Business is currently generating about 0.17 per unit of volatility. If you would invest 1,015 in Shining Building Business on November 5, 2024 and sell it today you would earn a total of 30.00 from holding Shining Building Business or generate 2.96% 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. Shining Building Business
Performance |
| Timeline |
| Hung Ching Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Shining Building Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hung Ching and Shining Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Ching and Shining Building
The main advantage of trading using opposite Hung Ching and Shining Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Ching position performs unexpectedly, Shining Building 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 Shining Building will offset losses from the drop in Shining Building's long position.The idea behind Hung Ching Development and Shining Building Business pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |