Correlation Between Hung Sheng and Anderson Industrial
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Anderson Industrial 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 Sheng and Anderson Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Sheng Construction and Anderson Industrial Corp, you can compare the effects of market volatilities on Hung Sheng and Anderson Industrial 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 Sheng with a short position of Anderson Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Anderson Industrial.
Diversification Opportunities for Hung Sheng and Anderson Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and Anderson is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Anderson Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anderson Industrial Corp and Hung Sheng 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 Sheng Construction are associated (or correlated) with Anderson Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anderson Industrial Corp has no effect on the direction of Hung Sheng i.e., Hung Sheng and Anderson Industrial go up and down completely randomly.
Pair Corralation between Hung Sheng and Anderson Industrial
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.67 times more return on investment than Anderson Industrial. However, Hung Sheng Construction is 1.49 times less risky than Anderson Industrial. It trades about 0.08 of its potential returns per unit of risk. Anderson Industrial Corp is currently generating about -0.36 per unit of risk. If you would invest 2,620 in Hung Sheng Construction on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Hung Sheng Construction or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Anderson Industrial Corp
Performance |
| Timeline |
| Hung Sheng Construction |
| Anderson Industrial Corp |
Hung Sheng and Anderson Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Anderson Industrial
The main advantage of trading using opposite Hung Sheng and Anderson Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Anderson Industrial 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 Anderson Industrial will offset losses from the drop in Anderson Industrial's long position.| Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
| Anderson Industrial vs. Awea Mechantronic Co | Anderson Industrial vs. Lee Chi Enterprises | Anderson Industrial vs. Kaulin Mfg | Anderson Industrial vs. Gordon Auto Body |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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