Correlation Between Hung Sheng and KS Terminals
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and KS Terminals 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 KS Terminals 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 KS Terminals, you can compare the effects of market volatilities on Hung Sheng and KS Terminals 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 KS Terminals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and KS Terminals.
Diversification Opportunities for Hung Sheng and KS Terminals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hung and 3003 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and KS Terminals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KS Terminals 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 KS Terminals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KS Terminals has no effect on the direction of Hung Sheng i.e., Hung Sheng and KS Terminals go up and down completely randomly.
Pair Corralation between Hung Sheng and KS Terminals
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.68 times more return on investment than KS Terminals. However, Hung Sheng Construction is 1.47 times less risky than KS Terminals. It trades about 0.01 of its potential returns per unit of risk. KS Terminals is currently generating about -0.1 per unit of risk. If you would invest 2,705 in Hung Sheng Construction on September 2, 2024 and sell it today you would lose (10.00) from holding Hung Sheng Construction or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. KS Terminals
Performance |
| Timeline |
| Hung Sheng Construction |
| KS Terminals |
Hung Sheng and KS Terminals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and KS Terminals
The main advantage of trading using opposite Hung Sheng and KS Terminals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, KS Terminals 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 KS Terminals will offset losses from the drop in KS Terminals' long position.| Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
| KS Terminals vs. BES Engineering Co | KS Terminals vs. Continental Holdings Corp | KS Terminals vs. Kee Tai Properties | KS Terminals 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |