Correlation Between Permanent TSB and Hang Seng
Can any of the company-specific risk be diversified away by investing in both Permanent TSB and Hang Seng 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 Permanent TSB and Hang Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permanent TSB Group and Hang Seng Bank, you can compare the effects of market volatilities on Permanent TSB and Hang Seng 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 Permanent TSB with a short position of Hang Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permanent TSB and Hang Seng.
Diversification Opportunities for Permanent TSB and Hang Seng
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Permanent and Hang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Permanent TSB Group and Hang Seng Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Seng Bank and Permanent TSB 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 Permanent TSB Group are associated (or correlated) with Hang Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Seng Bank has no effect on the direction of Permanent TSB i.e., Permanent TSB and Hang Seng go up and down completely randomly.
Pair Corralation between Permanent TSB and Hang Seng
Assuming the 90 days horizon Permanent TSB Group is expected to generate 0.95 times more return on investment than Hang Seng. However, Permanent TSB Group is 1.05 times less risky than Hang Seng. It trades about 0.0 of its potential returns per unit of risk. Hang Seng Bank is currently generating about 0.0 per unit of risk. If you would invest 185.00 in Permanent TSB Group on August 30, 2024 and sell it today you would lose (30.00) from holding Permanent TSB Group or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.26% |
| Values | Daily Returns |
Permanent TSB Group vs. Hang Seng Bank
Performance |
| Timeline |
| Permanent TSB Group |
| Hang Seng Bank |
Permanent TSB and Hang Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permanent TSB and Hang Seng
The main advantage of trading using opposite Permanent TSB and Hang Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permanent TSB position performs unexpectedly, Hang Seng 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 Hang Seng will offset losses from the drop in Hang Seng's long position.| Permanent TSB vs. Japan Post Holdings | Permanent TSB vs. Commercial International Bank | Permanent TSB vs. Kasikornbank Public Co | Permanent TSB vs. China Merchants Bank |
| Hang Seng vs. Permanent TSB Group | Hang Seng vs. Japan Post Holdings | Hang Seng vs. Commercial International Bank | Hang Seng vs. Kasikornbank Public Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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