Correlation Between Hung Sheng and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Huang Hsiang 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 Huang Hsiang 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 Huang Hsiang Construction, you can compare the effects of market volatilities on Hung Sheng and Huang Hsiang 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 Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Huang Hsiang.
Diversification Opportunities for Hung Sheng and Huang Hsiang
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and Huang is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction 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 Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Hung Sheng i.e., Hung Sheng and Huang Hsiang go up and down completely randomly.
Pair Corralation between Hung Sheng and Huang Hsiang
Assuming the 90 days trading horizon Hung Sheng is expected to generate 2.4 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, Hung Sheng Construction is 1.38 times less risky than Huang Hsiang. It trades about 0.03 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,025 in Huang Hsiang Construction on September 12, 2024 and sell it today you would earn a total of 2,575 from holding Huang Hsiang Construction or generate 63.98% 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. Huang Hsiang Construction
Performance |
| Timeline |
| Hung Sheng Construction |
| Huang Hsiang Construction |
Hung Sheng and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Huang Hsiang
The main advantage of trading using opposite Hung Sheng and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Hung Sheng vs. Chong Hong Construction | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. Symtek Automation Asia | Hung Sheng vs. WiseChip Semiconductor |
| Huang Hsiang vs. Chong Hong Construction | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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