Correlation Between Hung Sheng and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Tainet Communication 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 Tainet Communication 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 Tainet Communication System, you can compare the effects of market volatilities on Hung Sheng and Tainet Communication 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 Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Tainet Communication.
Diversification Opportunities for Hung Sheng and Tainet Communication
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hung and Tainet is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication 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 Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Hung Sheng i.e., Hung Sheng and Tainet Communication go up and down completely randomly.
Pair Corralation between Hung Sheng and Tainet Communication
Assuming the 90 days trading horizon Hung Sheng is expected to generate 2.52 times less return on investment than Tainet Communication. But when comparing it to its historical volatility, Hung Sheng Construction is 1.88 times less risky than Tainet Communication. It trades about 0.03 of its potential returns per unit of risk. Tainet Communication System is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,050 in Tainet Communication System on September 12, 2024 and sell it today you would earn a total of 2,770 from holding Tainet Communication System or generate 54.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Tainet Communication System
Performance |
| Timeline |
| Hung Sheng Construction |
| Tainet Communication |
Hung Sheng and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Tainet Communication
The main advantage of trading using opposite Hung Sheng and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication'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 |
| Tainet Communication vs. Gemtek Technology Co | Tainet Communication vs. Ruentex Development Co | Tainet Communication vs. WiseChip Semiconductor | Tainet Communication vs. Novatek Microelectronics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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