Correlation Between Hung Sheng and Adata Technology
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Adata Technology 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 Adata Technology 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 Adata Technology Co, you can compare the effects of market volatilities on Hung Sheng and Adata Technology 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 Adata Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Adata Technology.
Diversification Opportunities for Hung Sheng and Adata Technology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hung and Adata is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Adata Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adata Technology 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 Adata Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adata Technology has no effect on the direction of Hung Sheng i.e., Hung Sheng and Adata Technology go up and down completely randomly.
Pair Corralation between Hung Sheng and Adata Technology
Assuming the 90 days trading horizon Hung Sheng is expected to generate 3.01 times less return on investment than Adata Technology. But when comparing it to its historical volatility, Hung Sheng Construction is 1.67 times less risky than Adata Technology. It trades about 0.42 of its potential returns per unit of risk. Adata Technology Co is currently generating about 0.75 of returns per unit of risk over similar time horizon. If you would invest 7,393 in Adata Technology Co on November 28, 2024 and sell it today you would earn a total of 1,367 from holding Adata Technology Co or generate 18.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Adata Technology Co
Performance |
| Timeline |
| Hung Sheng Construction |
| Adata Technology |
Hung Sheng and Adata Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Adata Technology
The main advantage of trading using opposite Hung Sheng and Adata Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Adata Technology 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 Adata Technology will offset losses from the drop in Adata Technology'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 |
| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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