Correlation Between Hung Sheng and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Sun Sea 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 Sun Sea 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 Sun Sea Construction, you can compare the effects of market volatilities on Hung Sheng and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Sun Sea.
Diversification Opportunities for Hung Sheng and Sun Sea
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hung and Sun is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Hung Sheng i.e., Hung Sheng and Sun Sea go up and down completely randomly.
Pair Corralation between Hung Sheng and Sun Sea
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.73 times more return on investment than Sun Sea. However, Hung Sheng Construction is 1.37 times less risky than Sun Sea. It trades about 0.04 of its potential returns per unit of risk. Sun Sea Construction is currently generating about -0.05 per unit of risk. If you would invest 2,265 in Hung Sheng Construction on September 2, 2024 and sell it today you would earn a total of 430.00 from holding Hung Sheng Construction or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Sun Sea Construction
Performance |
| Timeline |
| Hung Sheng Construction |
| Sun Sea Construction |
Hung Sheng and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Sun Sea
The main advantage of trading using opposite Hung Sheng and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea'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 |
| Sun Sea vs. Ruentex Development Co | Sun Sea vs. United Integrated Services | Sun Sea vs. CTCI Corp | Sun Sea vs. Continental Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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