Correlation Between Hung Sheng and C Sun
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and C Sun 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 C Sun 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 C Sun Manufacturing, you can compare the effects of market volatilities on Hung Sheng and C Sun 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 C Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and C Sun.
Diversification Opportunities for Hung Sheng and C Sun
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hung and 2467 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and C Sun Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Sun Manufacturing 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 C Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Sun Manufacturing has no effect on the direction of Hung Sheng i.e., Hung Sheng and C Sun go up and down completely randomly.
Pair Corralation between Hung Sheng and C Sun
Assuming the 90 days trading horizon Hung Sheng Construction is expected to under-perform the C Sun. But the stock apears to be less risky and, when comparing its historical volatility, Hung Sheng Construction is 2.06 times less risky than C Sun. The stock trades about -0.02 of its potential returns per unit of risk. The C Sun Manufacturing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,000 in C Sun Manufacturing on September 3, 2024 and sell it today you would earn a total of 6,900 from holding C Sun Manufacturing or generate 53.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. C Sun Manufacturing
Performance |
| Timeline |
| Hung Sheng Construction |
| C Sun Manufacturing |
Hung Sheng and C Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and C Sun
The main advantage of trading using opposite Hung Sheng and C Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, C Sun 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 C Sun will offset losses from the drop in C Sun'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 |
| C Sun vs. TA I Technology Co | C Sun vs. G Shank Enterprise Co | C Sun vs. Siward Crystal Technology | C Sun vs. Mirle Automation Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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