Correlation Between Hung Sheng and Sinher Technology
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Sinher 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 Sinher 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 Sinher Technology, you can compare the effects of market volatilities on Hung Sheng and Sinher 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 Sinher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Sinher Technology.
Diversification Opportunities for Hung Sheng and Sinher Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hung and Sinher is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Sinher Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinher 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 Sinher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinher Technology has no effect on the direction of Hung Sheng i.e., Hung Sheng and Sinher Technology go up and down completely randomly.
Pair Corralation between Hung Sheng and Sinher Technology
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 1.11 times more return on investment than Sinher Technology. However, Hung Sheng is 1.11 times more volatile than Sinher Technology. It trades about 0.04 of its potential returns per unit of risk. Sinher Technology is currently generating about -0.19 per unit of risk. If you would invest 2,600 in Hung Sheng Construction on August 26, 2024 and sell it today you would earn a total of 25.00 from holding Hung Sheng Construction or generate 0.96% 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. Sinher Technology
Performance |
| Timeline |
| Hung Sheng Construction |
| Sinher Technology |
Hung Sheng and Sinher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Sinher Technology
The main advantage of trading using opposite Hung Sheng and Sinher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Sinher 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 Sinher Technology will offset losses from the drop in Sinher 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 |
| Sinher Technology vs. Hsing Ta Cement | Sinher Technology vs. Capital Futures Corp | Sinher Technology vs. First Insurance Co | Sinher Technology vs. Yem Chio Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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