Correlation Between Hung Sheng and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Ton Yi 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 Ton Yi 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 Ton Yi Industrial, you can compare the effects of market volatilities on Hung Sheng and Ton Yi 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 Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Ton Yi.
Diversification Opportunities for Hung Sheng and Ton Yi
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hung and Ton is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial 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 Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Hung Sheng i.e., Hung Sheng and Ton Yi go up and down completely randomly.
Pair Corralation between Hung Sheng and Ton Yi
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 0.87 times more return on investment than Ton Yi. However, Hung Sheng Construction is 1.15 times less risky than Ton Yi. It trades about 0.01 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.14 per unit of risk. If you would invest 2,630 in Hung Sheng Construction on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Hung Sheng Construction or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Ton Yi Industrial
Performance |
| Timeline |
| Hung Sheng Construction |
| Ton Yi Industrial |
Hung Sheng and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Ton Yi
The main advantage of trading using opposite Hung Sheng and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi'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 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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