Correlation Between Chong Hong and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Chong Hong 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 Chong Hong and Huang Hsiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chong Hong Construction and Huang Hsiang Construction, you can compare the effects of market volatilities on Chong Hong 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 Chong Hong with a short position of Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Huang Hsiang.
Diversification Opportunities for Chong Hong and Huang Hsiang
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chong and Huang is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction 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 Chong Hong 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 Chong Hong Construction 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 Chong Hong i.e., Chong Hong and Huang Hsiang go up and down completely randomly.
Pair Corralation between Chong Hong and Huang Hsiang
Assuming the 90 days trading horizon Chong Hong is expected to generate 2.15 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, Chong Hong Construction is 1.07 times less risky than Huang Hsiang. It trades about 0.04 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,900 in Huang Hsiang Construction on September 12, 2024 and sell it today you would earn a total of 2,700 from holding Huang Hsiang Construction or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. Huang Hsiang Construction
Performance |
| Timeline |
| Chong Hong Construction |
| Huang Hsiang Construction |
Chong Hong and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Huang Hsiang
The main advantage of trading using opposite Chong Hong and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong 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.| Chong Hong vs. Ruentex Development Co | Chong Hong vs. Symtek Automation Asia | Chong Hong vs. WiseChip Semiconductor | Chong Hong vs. Novatek Microelectronics Corp |
| Huang Hsiang vs. Chong Hong Construction | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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