Correlation Between Founding Construction and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Founding Construction and Huang Hsiang 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 Founding Construction and Huang Hsiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Founding Construction Development and Huang Hsiang Construction, you can compare the effects of market volatilities on Founding Construction and Huang Hsiang 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 Founding Construction with a short position of Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Founding Construction and Huang Hsiang.
Diversification Opportunities for Founding Construction and Huang Hsiang
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Founding and Huang is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Founding Construction Developm and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction and Founding Construction 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 Founding Construction Development are associated (or correlated) with Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Founding Construction i.e., Founding Construction and Huang Hsiang go up and down completely randomly.
Pair Corralation between Founding Construction and Huang Hsiang
Assuming the 90 days trading horizon Founding Construction is expected to generate 8.44 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, Founding Construction Development is 2.27 times less risky than Huang Hsiang. It trades about 0.15 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 5,830 in Huang Hsiang Construction on August 27, 2024 and sell it today you would earn a total of 1,940 from holding Huang Hsiang Construction or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Founding Construction Developm vs. Huang Hsiang Construction
Performance |
| Timeline |
| Founding Construction |
| Huang Hsiang Construction |
Founding Construction and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Founding Construction and Huang Hsiang
The main advantage of trading using opposite Founding Construction and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Founding Construction position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Founding Construction vs. Chainqui Construction Development | Founding Construction vs. Zinwell | Founding Construction vs. Symtek Automation Asia | Founding Construction vs. CTCI Corp |
| Huang Hsiang vs. Highwealth Construction Corp | Huang Hsiang vs. Huaku Development Co | Huang Hsiang vs. Kindom Construction Corp | Huang Hsiang vs. Cathay 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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