Correlation Between Hung Sheng and Chong Hong
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Chong Hong 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 Chong Hong 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 Chong Hong Construction, you can compare the effects of market volatilities on Hung Sheng and Chong Hong 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 Chong Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Chong Hong.
Diversification Opportunities for Hung Sheng and Chong Hong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hung and Chong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Chong Hong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chong Hong 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 Chong Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chong Hong Construction has no effect on the direction of Hung Sheng i.e., Hung Sheng and Chong Hong go up and down completely randomly.
Pair Corralation between Hung Sheng and Chong Hong
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.73 times more return on investment than Chong Hong. However, Hung Sheng Construction is 1.38 times less risky than Chong Hong. It trades about 0.07 of its potential returns per unit of risk. Chong Hong Construction is currently generating about 0.04 per unit of risk. If you would invest 2,045 in Hung Sheng Construction on August 27, 2024 and sell it today you would earn a total of 580.00 from holding Hung Sheng Construction or generate 28.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Chong Hong Construction
Performance |
| Timeline |
| Hung Sheng Construction |
| Chong Hong Construction |
Hung Sheng and Chong Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Chong Hong
The main advantage of trading using opposite Hung Sheng and Chong Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Chong Hong 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 Chong Hong will offset losses from the drop in Chong Hong'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 |
| Chong Hong vs. Huaku Development Co | Chong Hong vs. Farglory Land Development | Chong Hong vs. Highwealth Construction Corp | Chong Hong vs. Ruentex Development 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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