Correlation Between I Sheng and Pacific Construction
Can any of the company-specific risk be diversified away by investing in both I Sheng and Pacific Construction 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 I Sheng and Pacific Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Sheng Electric Wire and Pacific Construction Co, you can compare the effects of market volatilities on I Sheng and Pacific Construction 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 I Sheng with a short position of Pacific Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and Pacific Construction.
Diversification Opportunities for I Sheng and Pacific Construction
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 6115 and Pacific is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire and Pacific Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Construction and I Sheng 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 I Sheng Electric Wire are associated (or correlated) with Pacific Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Construction has no effect on the direction of I Sheng i.e., I Sheng and Pacific Construction go up and down completely randomly.
Pair Corralation between I Sheng and Pacific Construction
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to generate 0.35 times more return on investment than Pacific Construction. However, I Sheng Electric Wire is 2.86 times less risky than Pacific Construction. It trades about -0.14 of its potential returns per unit of risk. Pacific Construction Co is currently generating about -0.07 per unit of risk. If you would invest 5,330 in I Sheng Electric Wire on September 12, 2024 and sell it today you would lose (100.00) from holding I Sheng Electric Wire or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
I Sheng Electric Wire vs. Pacific Construction Co
Performance |
| Timeline |
| I Sheng Electric |
| Pacific Construction |
I Sheng and Pacific Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Sheng and Pacific Construction
The main advantage of trading using opposite I Sheng and Pacific Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng position performs unexpectedly, Pacific Construction 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 Pacific Construction will offset losses from the drop in Pacific Construction's long position.| I Sheng vs. Unitech Computer Co | I Sheng vs. Chinese Maritime Transport | I Sheng vs. Cameo Communications | I Sheng vs. Compal Broadband Networks |
| Pacific Construction vs. Chong Hong Construction | Pacific Construction vs. Ruentex Development Co | Pacific Construction vs. Symtek Automation Asia | Pacific Construction 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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