Correlation Between Swancor Holding and Hsin Kuang
Can any of the company-specific risk be diversified away by investing in both Swancor Holding and Hsin Kuang 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 Swancor Holding and Hsin Kuang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swancor Holding Co and Hsin Kuang Steel, you can compare the effects of market volatilities on Swancor Holding and Hsin Kuang 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 Swancor Holding with a short position of Hsin Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swancor Holding and Hsin Kuang.
Diversification Opportunities for Swancor Holding and Hsin Kuang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swancor and Hsin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Swancor Holding Co and Hsin Kuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Kuang Steel and Swancor Holding 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 Swancor Holding Co are associated (or correlated) with Hsin Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Kuang Steel has no effect on the direction of Swancor Holding i.e., Swancor Holding and Hsin Kuang go up and down completely randomly.
Pair Corralation between Swancor Holding and Hsin Kuang
Assuming the 90 days trading horizon Swancor Holding Co is expected to under-perform the Hsin Kuang. In addition to that, Swancor Holding is 1.51 times more volatile than Hsin Kuang Steel. It trades about -0.07 of its total potential returns per unit of risk. Hsin Kuang Steel is currently generating about -0.06 per unit of volatility. If you would invest 6,080 in Hsin Kuang Steel on September 1, 2024 and sell it today you would lose (1,125) from holding Hsin Kuang Steel or give up 18.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Swancor Holding Co vs. Hsin Kuang Steel
Performance |
| Timeline |
| Swancor Holding |
| Hsin Kuang Steel |
Swancor Holding and Hsin Kuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swancor Holding and Hsin Kuang
The main advantage of trading using opposite Swancor Holding and Hsin Kuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swancor Holding position performs unexpectedly, Hsin Kuang 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 Kuang will offset losses from the drop in Hsin Kuang's long position.| Swancor Holding vs. Century Iron And | Swancor Holding vs. Yeong Guan Energy | Swancor Holding vs. Chung Hsin Electric Machinery | Swancor Holding vs. Unimicron Technology Corp |
| Hsin Kuang vs. Chung Hung Steel | Hsin Kuang vs. Tung Ho Steel | Hsin Kuang vs. Ta Chen Stainless | Hsin Kuang vs. Feng Hsin Steel |
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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