Correlation Between Hung Sheng and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Hiwin Technologies 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 Hiwin Technologies 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 Hiwin Technologies Corp, you can compare the effects of market volatilities on Hung Sheng and Hiwin Technologies 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 Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Hiwin Technologies.
Diversification Opportunities for Hung Sheng and Hiwin Technologies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and Hiwin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies 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 Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of Hung Sheng i.e., Hung Sheng and Hiwin Technologies go up and down completely randomly.
Pair Corralation between Hung Sheng and Hiwin Technologies
Assuming the 90 days trading horizon Hung Sheng is expected to generate 2.85 times less return on investment than Hiwin Technologies. But when comparing it to its historical volatility, Hung Sheng Construction is 1.39 times less risky than Hiwin Technologies. It trades about 0.02 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 18,300 in Hiwin Technologies Corp on September 3, 2024 and sell it today you would earn a total of 4,850 from holding Hiwin Technologies Corp or generate 26.5% 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. Hiwin Technologies Corp
Performance |
| Timeline |
| Hung Sheng Construction |
| Hiwin Technologies Corp |
Hung Sheng and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Hiwin Technologies
The main advantage of trading using opposite Hung Sheng and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.| Hung Sheng vs. Huaku Development Co | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. Taiwan Cement Corp | Hung Sheng vs. Symtek Automation Asia |
| Hiwin Technologies vs. Universal Microelectronics Co | Hiwin Technologies vs. AVerMedia Technologies | Hiwin Technologies vs. Symtek Automation Asia | Hiwin Technologies vs. WiseChip Semiconductor |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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