Correlation Between Hung Sheng and Provision Information
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Provision Information 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 Provision Information 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 Provision Information CoLtd, you can compare the effects of market volatilities on Hung Sheng and Provision Information 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 Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Provision Information.
Diversification Opportunities for Hung Sheng and Provision Information
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hung and Provision is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information 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 Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of Hung Sheng i.e., Hung Sheng and Provision Information go up and down completely randomly.
Pair Corralation between Hung Sheng and Provision Information
Assuming the 90 days trading horizon Hung Sheng Construction is expected to under-perform the Provision Information. In addition to that, Hung Sheng is 2.35 times more volatile than Provision Information CoLtd. It trades about -0.18 of its total potential returns per unit of risk. Provision Information CoLtd is currently generating about -0.14 per unit of volatility. If you would invest 7,600 in Provision Information CoLtd on October 25, 2024 and sell it today you would lose (200.00) from holding Provision Information CoLtd or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Provision Information CoLtd
Performance |
| Timeline |
| Hung Sheng Construction |
| Provision Information |
Hung Sheng and Provision Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Provision Information
The main advantage of trading using opposite Hung Sheng and Provision Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Provision Information 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 Provision Information will offset losses from the drop in Provision Information'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 |
| Provision Information vs. Grand Plastic Technology | Provision Information vs. HOYA Resort Hotel | Provision Information vs. Solar Applied Materials | Provision Information vs. DingZing Advanced Materials |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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