Correlation Between Hang Seng and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both Hang Seng and Permanent TSB 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 Hang Seng and Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Seng Bank and Permanent TSB Group, you can compare the effects of market volatilities on Hang Seng and Permanent TSB 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 Hang Seng with a short position of Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Seng and Permanent TSB.
Diversification Opportunities for Hang Seng and Permanent TSB
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hang and Permanent is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng Bank and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group and Hang Seng 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 Hang Seng Bank are associated (or correlated) with Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of Hang Seng i.e., Hang Seng and Permanent TSB go up and down completely randomly.
Pair Corralation between Hang Seng and Permanent TSB
If you would invest 1,200 in Hang Seng Bank on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Hang Seng Bank or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Hang Seng Bank vs. Permanent TSB Group
Performance |
| Timeline |
| Hang Seng Bank |
| Permanent TSB Group |
Hang Seng and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Seng and Permanent TSB
The main advantage of trading using opposite Hang Seng and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Seng position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.| Hang Seng vs. Caixabank SA ADR | Hang Seng vs. Commercial International Bank | Hang Seng vs. PT Bank Rakyat | Hang Seng vs. Riverview Bancorp |
| Permanent TSB vs. Japan Post Holdings | Permanent TSB vs. Commercial International Bank | Permanent TSB vs. Kasikornbank Public Co | Permanent TSB vs. China Merchants Bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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