Correlation Between Hung Sheng and Jinli Group
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Jinli Group 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 Jinli Group 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 Jinli Group Holdings, you can compare the effects of market volatilities on Hung Sheng and Jinli Group 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 Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Jinli Group.
Diversification Opportunities for Hung Sheng and Jinli Group
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hung and Jinli is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings 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 Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Hung Sheng i.e., Hung Sheng and Jinli Group go up and down completely randomly.
Pair Corralation between Hung Sheng and Jinli Group
Assuming the 90 days trading horizon Hung Sheng is expected to generate 5.36 times less return on investment than Jinli Group. But when comparing it to its historical volatility, Hung Sheng Construction is 1.54 times less risky than Jinli Group. It trades about 0.09 of its potential returns per unit of risk. Jinli Group Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,080 in Jinli Group Holdings on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Jinli Group Holdings or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hung Sheng Construction vs. Jinli Group Holdings
Performance |
| Timeline |
| Hung Sheng Construction |
| Jinli Group Holdings |
Hung Sheng and Jinli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Jinli Group
The main advantage of trading using opposite Hung Sheng and Jinli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Jinli Group 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 Jinli Group will offset losses from the drop in Jinli Group's long position.| Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. CTCI Corp | Hung Sheng vs. Information Technology Total | Hung Sheng vs. Ennoconn Corp |
| Jinli Group vs. Shui Mu International Co | Jinli Group vs. Les Enphants Co | Jinli Group vs. Victory New Materials | Jinli Group vs. Shinih Enterprise 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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