Correlation Between Hung Sheng and Gem Terminal
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Gem Terminal 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 Gem Terminal 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 Gem Terminal Industry, you can compare the effects of market volatilities on Hung Sheng and Gem Terminal 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 Gem Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Gem Terminal.
Diversification Opportunities for Hung Sheng and Gem Terminal
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hung and Gem is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Gem Terminal Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gem Terminal Industry 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 Gem Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gem Terminal Industry has no effect on the direction of Hung Sheng i.e., Hung Sheng and Gem Terminal go up and down completely randomly.
Pair Corralation between Hung Sheng and Gem Terminal
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.68 times more return on investment than Gem Terminal. However, Hung Sheng Construction is 1.46 times less risky than Gem Terminal. It trades about 0.0 of its potential returns per unit of risk. Gem Terminal Industry is currently generating about -0.07 per unit of risk. If you would invest 2,750 in Hung Sheng Construction on September 3, 2024 and sell it today you would lose (60.00) from holding Hung Sheng Construction or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Gem Terminal Industry
Performance |
| Timeline |
| Hung Sheng Construction |
| Gem Terminal Industry |
Hung Sheng and Gem Terminal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Gem Terminal
The main advantage of trading using opposite Hung Sheng and Gem Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Gem Terminal 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 Gem Terminal will offset losses from the drop in Gem Terminal's 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 |
| Gem Terminal vs. Universal Microelectronics Co | Gem Terminal vs. AVerMedia Technologies | Gem Terminal vs. Symtek Automation Asia | Gem Terminal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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