Correlation Between Min Aik and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Min Aik and Hung Sheng 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 Min Aik and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Min Aik Technology and Hung Sheng Construction, you can compare the effects of market volatilities on Min Aik and Hung Sheng 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 Min Aik with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Hung Sheng.
Diversification Opportunities for Min Aik and Hung Sheng
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Min and Hung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Hung Sheng Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Sheng Construction and Min Aik 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 Min Aik Technology are associated (or correlated) with Hung Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Sheng Construction has no effect on the direction of Min Aik i.e., Min Aik and Hung Sheng go up and down completely randomly.
Pair Corralation between Min Aik and Hung Sheng
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.77 times more return on investment than Hung Sheng. However, Min Aik is 1.77 times more volatile than Hung Sheng Construction. It trades about 0.04 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.04 per unit of risk. If you would invest 1,715 in Min Aik Technology on September 2, 2024 and sell it today you would earn a total of 635.00 from holding Min Aik Technology or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Min Aik Technology vs. Hung Sheng Construction
Performance |
| Timeline |
| Min Aik Technology |
| Hung Sheng Construction |
Min Aik and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Hung Sheng
The main advantage of trading using opposite Min Aik and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Hung Sheng 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 Hung Sheng will offset losses from the drop in Hung Sheng's long position.The idea behind Min Aik Technology and Hung Sheng Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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