Correlation Between Hung Sheng and Evergreen Marine
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Evergreen Marine 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 Evergreen Marine 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 Evergreen Marine Corp, you can compare the effects of market volatilities on Hung Sheng and Evergreen Marine 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 Evergreen Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Evergreen Marine.
Diversification Opportunities for Hung Sheng and Evergreen Marine
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hung and Evergreen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Evergreen Marine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Marine 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 Evergreen Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Marine Corp has no effect on the direction of Hung Sheng i.e., Hung Sheng and Evergreen Marine go up and down completely randomly.
Pair Corralation between Hung Sheng and Evergreen Marine
Assuming the 90 days trading horizon Hung Sheng is expected to generate 33.78 times less return on investment than Evergreen Marine. But when comparing it to its historical volatility, Hung Sheng Construction is 1.39 times less risky than Evergreen Marine. It trades about 0.01 of its potential returns per unit of risk. Evergreen Marine Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 18,200 in Evergreen Marine Corp on September 2, 2024 and sell it today you would earn a total of 3,500 from holding Evergreen Marine Corp or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Evergreen Marine Corp
Performance |
| Timeline |
| Hung Sheng Construction |
| Evergreen Marine Corp |
Hung Sheng and Evergreen Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Evergreen Marine
The main advantage of trading using opposite Hung Sheng and Evergreen Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Evergreen Marine 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 Evergreen Marine will offset losses from the drop in Evergreen Marine'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 |
| Evergreen Marine vs. Yang Ming Marine | Evergreen Marine vs. Wan Hai Lines | Evergreen Marine vs. Eva Airways Corp | Evergreen Marine vs. China Airlines |
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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