Correlation Between Hung Sheng and Concord Securities
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Concord Securities 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 Concord Securities 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 Concord Securities Co, you can compare the effects of market volatilities on Hung Sheng and Concord Securities 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 Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Concord Securities.
Diversification Opportunities for Hung Sheng and Concord Securities
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hung and Concord is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities 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 Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Hung Sheng i.e., Hung Sheng and Concord Securities go up and down completely randomly.
Pair Corralation between Hung Sheng and Concord Securities
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 2.81 times more return on investment than Concord Securities. However, Hung Sheng is 2.81 times more volatile than Concord Securities Co. It trades about 0.08 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.09 per unit of risk. If you would invest 2,610 in Hung Sheng Construction on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Hung Sheng Construction or generate 2.68% 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. Concord Securities Co
Performance |
| Timeline |
| Hung Sheng Construction |
| Concord Securities |
Hung Sheng and Concord Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Concord Securities
The main advantage of trading using opposite Hung Sheng and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' long position.| Hung Sheng vs. Tainan Spinning Co | Hung Sheng vs. Carnival Industrial Corp | Hung Sheng vs. Symtek Automation Asia | Hung Sheng vs. CTCI Corp |
| Concord Securities vs. Sinopac Financial Holdings | Concord Securities vs. China Development Financial | Concord Securities vs. Symtek Automation Asia | Concord Securities vs. CTCI 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 Stocks Directory module to find actively traded stocks across global markets.
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