Correlation Between Hung Sheng and Wisdom Marine
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Wisdom 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 Wisdom 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 Wisdom Marine Lines, you can compare the effects of market volatilities on Hung Sheng and Wisdom 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 Wisdom Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Wisdom Marine.
Diversification Opportunities for Hung Sheng and Wisdom Marine
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hung and Wisdom is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Wisdom Marine Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdom Marine Lines 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 Wisdom Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdom Marine Lines has no effect on the direction of Hung Sheng i.e., Hung Sheng and Wisdom Marine go up and down completely randomly.
Pair Corralation between Hung Sheng and Wisdom Marine
Assuming the 90 days trading horizon Hung Sheng Construction is expected to under-perform the Wisdom Marine. But the stock apears to be less risky and, when comparing its historical volatility, Hung Sheng Construction is 1.25 times less risky than Wisdom Marine. The stock trades about 0.0 of its potential returns per unit of risk. The Wisdom Marine Lines is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,480 in Wisdom Marine Lines on September 2, 2024 and sell it today you would lose (30.00) from holding Wisdom Marine Lines or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Wisdom Marine Lines
Performance |
| Timeline |
| Hung Sheng Construction |
| Wisdom Marine Lines |
Hung Sheng and Wisdom Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Wisdom Marine
The main advantage of trading using opposite Hung Sheng and Wisdom Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Wisdom 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 Wisdom Marine will offset losses from the drop in Wisdom 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 |
| Wisdom Marine vs. BES Engineering Co | Wisdom Marine vs. Continental Holdings Corp | Wisdom Marine vs. Kee Tai Properties | Wisdom Marine vs. Hung Sheng Construction |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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