Correlation Between Continental Holdings and Hsin Yung
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Hsin Yung 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 Continental Holdings and Hsin Yung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Hsin Yung Chien, you can compare the effects of market volatilities on Continental Holdings and Hsin Yung 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 Continental Holdings with a short position of Hsin Yung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Hsin Yung.
Diversification Opportunities for Continental Holdings and Hsin Yung
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Continental and Hsin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Hsin Yung Chien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Yung Chien and Continental Holdings 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 Continental Holdings Corp are associated (or correlated) with Hsin Yung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Yung Chien has no effect on the direction of Continental Holdings i.e., Continental Holdings and Hsin Yung go up and down completely randomly.
Pair Corralation between Continental Holdings and Hsin Yung
Assuming the 90 days trading horizon Continental Holdings Corp is expected to generate 1.83 times more return on investment than Hsin Yung. However, Continental Holdings is 1.83 times more volatile than Hsin Yung Chien. It trades about 0.01 of its potential returns per unit of risk. Hsin Yung Chien is currently generating about 0.0 per unit of risk. If you would invest 2,965 in Continental Holdings Corp on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Continental Holdings Corp or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Hsin Yung Chien
Performance |
| Timeline |
| Continental Holdings Corp |
| Hsin Yung Chien |
Continental Holdings and Hsin Yung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Hsin Yung
The main advantage of trading using opposite Continental Holdings and Hsin Yung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Hsin Yung 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 Hsin Yung will offset losses from the drop in Hsin Yung's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
| Hsin Yung vs. BES Engineering Co | Hsin Yung vs. Continental Holdings Corp | Hsin Yung vs. Kee Tai Properties | Hsin Yung vs. Hung Sheng Construction |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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