Correlation Between Tainet Communication and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Tainet Communication 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 Tainet Communication and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and Hung Sheng Construction, you can compare the effects of market volatilities on Tainet Communication 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 Tainet Communication with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and Hung Sheng.
Diversification Opportunities for Tainet Communication and Hung Sheng
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tainet and Hung is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System 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 Tainet Communication 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 Tainet Communication System 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 Tainet Communication i.e., Tainet Communication and Hung Sheng go up and down completely randomly.
Pair Corralation between Tainet Communication and Hung Sheng
Assuming the 90 days trading horizon Tainet Communication System is expected to generate 1.88 times more return on investment than Hung Sheng. However, Tainet Communication is 1.88 times more volatile than Hung Sheng Construction. It trades about 0.05 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.03 per unit of risk. If you would invest 5,050 in Tainet Communication System on September 12, 2024 and sell it today you would earn a total of 2,770 from holding Tainet Communication System or generate 54.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainet Communication System vs. Hung Sheng Construction
Performance |
| Timeline |
| Tainet Communication |
| Hung Sheng Construction |
Tainet Communication and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and Hung Sheng
The main advantage of trading using opposite Tainet Communication and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication 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.| Tainet Communication vs. Gemtek Technology Co | Tainet Communication vs. Ruentex Development Co | Tainet Communication vs. WiseChip Semiconductor | Tainet Communication vs. Novatek Microelectronics Corp |
| Hung Sheng vs. Chong Hong Construction | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. Symtek Automation Asia | Hung Sheng vs. WiseChip Semiconductor |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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