Correlation Between Strong H and San Shing
Can any of the company-specific risk be diversified away by investing in both Strong H and San Shing 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 Strong H and San Shing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strong H Machinery and San Shing Fastech, you can compare the effects of market volatilities on Strong H and San Shing 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 Strong H with a short position of San Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strong H and San Shing.
Diversification Opportunities for Strong H and San Shing
Very good diversification
The 3 months correlation between Strong and San is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Strong H Machinery and San Shing Fastech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Shing Fastech and Strong H 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 Strong H Machinery are associated (or correlated) with San Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Shing Fastech has no effect on the direction of Strong H i.e., Strong H and San Shing go up and down completely randomly.
Pair Corralation between Strong H and San Shing
Assuming the 90 days trading horizon Strong H Machinery is expected to generate 1.66 times more return on investment than San Shing. However, Strong H is 1.66 times more volatile than San Shing Fastech. It trades about 0.06 of its potential returns per unit of risk. San Shing Fastech is currently generating about -0.05 per unit of risk. If you would invest 3,300 in Strong H Machinery on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Strong H Machinery or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strong H Machinery vs. San Shing Fastech
Performance |
| Timeline |
| Strong H Machinery |
| San Shing Fastech |
Strong H and San Shing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strong H and San Shing
The main advantage of trading using opposite Strong H and San Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strong H position performs unexpectedly, San Shing 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 San Shing will offset losses from the drop in San Shing's long position.| Strong H vs. San Shing Fastech | Strong H vs. QST International | Strong H vs. Intai Technology | Strong H vs. WiseChip Semiconductor |
| San Shing vs. Topco Scientific Co | San Shing vs. WPG Holdings | San Shing vs. Charoen Pokphand Enterprise | San Shing vs. Merida Industry Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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