Correlation Between Farglory Land and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Farglory Land 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 Farglory Land and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory Land Development and Hung Sheng Construction, you can compare the effects of market volatilities on Farglory Land 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 Farglory Land with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory Land and Hung Sheng.
Diversification Opportunities for Farglory Land and Hung Sheng
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farglory and Hung is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Farglory Land Development 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 Farglory Land 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 Farglory Land Development 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 Farglory Land i.e., Farglory Land and Hung Sheng go up and down completely randomly.
Pair Corralation between Farglory Land and Hung Sheng
Assuming the 90 days trading horizon Farglory Land Development is expected to generate 1.4 times more return on investment than Hung Sheng. However, Farglory Land is 1.4 times more volatile than Hung Sheng Construction. It trades about -0.03 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about -0.08 per unit of risk. If you would invest 8,700 in Farglory Land Development on October 26, 2024 and sell it today you would lose (1,200) from holding Farglory Land Development or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory Land Development vs. Hung Sheng Construction
Performance |
| Timeline |
| Farglory Land Development |
| Hung Sheng Construction |
Farglory Land and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory Land and Hung Sheng
The main advantage of trading using opposite Farglory Land and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory Land 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.| Farglory Land vs. Highwealth Construction Corp | Farglory Land vs. Huaku Development Co | Farglory Land vs. Chong Hong Construction | Farglory Land vs. Taiwan Fertilizer Co |
| Hung Sheng vs. Shining Building Business | Hung Sheng vs. Chong Hong Construction | Hung Sheng vs. Farglory Land Development | Hung Sheng vs. Sweeten Real Estate |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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