Correlation Between Hwa Fong and City Sports
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and City Sports 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 Hwa Fong and City Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and City Sports and, you can compare the effects of market volatilities on Hwa Fong and City Sports 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 Hwa Fong with a short position of City Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and City Sports.
Diversification Opportunities for Hwa Fong and City Sports
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hwa and City is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and City Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Sports and Hwa Fong 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 Hwa Fong Rubber are associated (or correlated) with City Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Sports has no effect on the direction of Hwa Fong i.e., Hwa Fong and City Sports go up and down completely randomly.
Pair Corralation between Hwa Fong and City Sports
Assuming the 90 days trading horizon Hwa Fong is expected to generate 1.01 times less return on investment than City Sports. In addition to that, Hwa Fong is 1.0 times more volatile than City Sports and. It trades about 0.05 of its total potential returns per unit of risk. City Sports and is currently generating about 0.05 per unit of volatility. If you would invest 6,831 in City Sports and on September 12, 2024 and sell it today you would earn a total of 1,794 from holding City Sports and or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. City Sports and
Performance |
| Timeline |
| Hwa Fong Rubber |
| City Sports |
Hwa Fong and City Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and City Sports
The main advantage of trading using opposite Hwa Fong and City Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, City Sports 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 City Sports will offset losses from the drop in City Sports' long position.| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
| City Sports vs. Hwa Fong Rubber | City Sports vs. AAPICO Hitech Public | City Sports vs. Haad Thip Public | City Sports vs. Italian Thai Development Public |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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