Correlation Between Da Cin and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Da Cin and Huang Hsiang 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 Da Cin and Huang Hsiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and Huang Hsiang Construction, you can compare the effects of market volatilities on Da Cin and Huang Hsiang 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 Da Cin with a short position of Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and Huang Hsiang.
Diversification Opportunities for Da Cin and Huang Hsiang
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2535 and Huang is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction and Da Cin 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 Da Cin Construction Co are associated (or correlated) with Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Da Cin i.e., Da Cin and Huang Hsiang go up and down completely randomly.
Pair Corralation between Da Cin and Huang Hsiang
Assuming the 90 days trading horizon Da Cin is expected to generate 10.9 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, Da Cin Construction Co is 4.66 times less risky than Huang Hsiang. It trades about 0.19 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 5,740 in Huang Hsiang Construction on September 1, 2024 and sell it today you would earn a total of 1,850 from holding Huang Hsiang Construction or generate 32.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Da Cin Construction Co vs. Huang Hsiang Construction
Performance |
| Timeline |
| Da Cin Construction |
| Huang Hsiang Construction |
Da Cin and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Cin and Huang Hsiang
The main advantage of trading using opposite Da Cin and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Da Cin vs. Huaku Development Co | Da Cin vs. Highwealth Construction Corp | Da Cin vs. Kindom Construction Corp | Da Cin vs. Kedge Construction Co |
| Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. CTCI Corp | Huang Hsiang vs. Information Technology Total | Huang Hsiang vs. Ennoconn 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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