Correlation Between Genovate Biotechnology and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology 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 Genovate Biotechnology and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genovate Biotechnology Co and Hung Sheng Construction, you can compare the effects of market volatilities on Genovate Biotechnology 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 Genovate Biotechnology with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Hung Sheng.
Diversification Opportunities for Genovate Biotechnology and Hung Sheng
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genovate and Hung is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co 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 Genovate Biotechnology 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 Genovate Biotechnology Co 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 Genovate Biotechnology i.e., Genovate Biotechnology and Hung Sheng go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Hung Sheng
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to generate 3.75 times more return on investment than Hung Sheng. However, Genovate Biotechnology is 3.75 times more volatile than Hung Sheng Construction. It trades about 0.01 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 2,858 in Genovate Biotechnology Co on August 31, 2024 and sell it today you would lose (688.00) from holding Genovate Biotechnology Co or give up 24.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. Hung Sheng Construction
Performance |
| Timeline |
| Genovate Biotechnology |
| Hung Sheng Construction |
Genovate Biotechnology and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Hung Sheng
The main advantage of trading using opposite Genovate Biotechnology and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology 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.| Genovate Biotechnology vs. Pili International Multimedia | Genovate Biotechnology vs. Tung Ho Steel | Genovate Biotechnology vs. China Steel Corp | Genovate Biotechnology vs. Mayer Steel Pipe |
| Hung Sheng vs. Huaku Development Co | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. CTCI Corp | Hung Sheng vs. Information Technology Total |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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