Correlation Between WiseChip Semiconductor and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor 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 WiseChip Semiconductor and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Hung Sheng Construction, you can compare the effects of market volatilities on WiseChip Semiconductor 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 WiseChip Semiconductor with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Hung Sheng.
Diversification Opportunities for WiseChip Semiconductor and Hung Sheng
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WiseChip and Hung is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor 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 WiseChip Semiconductor 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 WiseChip Semiconductor 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 WiseChip Semiconductor i.e., WiseChip Semiconductor and Hung Sheng go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Hung Sheng
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Hung Sheng. In addition to that, WiseChip Semiconductor is 1.37 times more volatile than Hung Sheng Construction. It trades about -0.03 of its total potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.03 per unit of volatility. If you would invest 2,280 in Hung Sheng Construction on September 12, 2024 and sell it today you would earn a total of 490.00 from holding Hung Sheng Construction or generate 21.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Hung Sheng Construction
Performance |
| Timeline |
| WiseChip Semiconductor |
| Hung Sheng Construction |
WiseChip Semiconductor and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Hung Sheng
The main advantage of trading using opposite WiseChip Semiconductor and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor 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.| WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp | WiseChip Semiconductor vs. Ruentex Development Co | WiseChip Semiconductor 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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