Correlation Between Hung Sheng and U Media
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and U Media 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 U Media 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 U Media Communications, you can compare the effects of market volatilities on Hung Sheng and U Media 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 U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and U Media.
Diversification Opportunities for Hung Sheng and U Media
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hung and 6470 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications 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 U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Hung Sheng i.e., Hung Sheng and U Media go up and down completely randomly.
Pair Corralation between Hung Sheng and U Media
Assuming the 90 days trading horizon Hung Sheng is expected to generate 1.03 times less return on investment than U Media. But when comparing it to its historical volatility, Hung Sheng Construction is 1.4 times less risky than U Media. It trades about 0.03 of its potential returns per unit of risk. U Media Communications is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,144 in U Media Communications on September 12, 2024 and sell it today you would earn a total of 836.00 from holding U Media Communications or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. U Media Communications
Performance |
| Timeline |
| Hung Sheng Construction |
| U Media Communications |
Hung Sheng and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and U Media
The main advantage of trading using opposite Hung Sheng and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, U Media 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 U Media will offset losses from the drop in U Media'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 |
| U Media vs. Gemtek Technology Co | U Media vs. Ruentex Development Co | U Media vs. WiseChip Semiconductor | U Media 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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