Correlation Between Tait Marketing and Hung Sheng
Can any of the company-specific risk be diversified away by investing in both Tait Marketing 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 Tait Marketing and Hung Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tait Marketing Distribution and Hung Sheng Construction, you can compare the effects of market volatilities on Tait Marketing 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 Tait Marketing with a short position of Hung Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and Hung Sheng.
Diversification Opportunities for Tait Marketing and Hung Sheng
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tait and Hung is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution 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 Tait Marketing 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 Tait Marketing Distribution 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 Tait Marketing i.e., Tait Marketing and Hung Sheng go up and down completely randomly.
Pair Corralation between Tait Marketing and Hung Sheng
Assuming the 90 days trading horizon Tait Marketing is expected to generate 2.1 times less return on investment than Hung Sheng. But when comparing it to its historical volatility, Tait Marketing Distribution is 2.95 times less risky than Hung Sheng. It trades about 0.14 of its potential returns per unit of risk. Hung Sheng Construction is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,610 in Hung Sheng Construction on September 13, 2024 and sell it today you would earn a total of 95.00 from holding Hung Sheng Construction or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tait Marketing Distribution vs. Hung Sheng Construction
Performance |
| Timeline |
| Tait Marketing Distr |
| Hung Sheng Construction |
Tait Marketing and Hung Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tait Marketing and Hung Sheng
The main advantage of trading using opposite Tait Marketing and Hung Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tait Marketing 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.| Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. Fubon MSCI Taiwan | Tait Marketing vs. YuantaP shares Taiwan Mid Cap |
| Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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