Correlation Between Keck Seng and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Keck Seng and Hua Hong 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 Keck Seng and Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Investments and Hua Hong Semiconductor, you can compare the effects of market volatilities on Keck Seng and Hua Hong 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 Keck Seng with a short position of Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Hua Hong.
Diversification Opportunities for Keck Seng and Hua Hong
Good diversification
The 3 months correlation between Keck and Hua is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor and Keck 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 Keck Seng Investments are associated (or correlated) with Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Keck Seng i.e., Keck Seng and Hua Hong go up and down completely randomly.
Pair Corralation between Keck Seng and Hua Hong
Assuming the 90 days horizon Keck Seng Investments is expected to generate 1.35 times more return on investment than Hua Hong. However, Keck Seng is 1.35 times more volatile than Hua Hong Semiconductor. It trades about 0.07 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.07 per unit of risk. If you would invest 16.00 in Keck Seng Investments on October 12, 2024 and sell it today you would earn a total of 11.00 from holding Keck Seng Investments or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. Hua Hong Semiconductor
Performance |
| Timeline |
| Keck Seng Investments |
| Hua Hong Semiconductor |
Keck Seng and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and Hua Hong
The main advantage of trading using opposite Keck Seng and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| Keck Seng vs. Marriott International | Keck Seng vs. Hyatt Hotels | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. INTERCONT HOTELS |
| Hua Hong vs. Guangdong Investment Limited | Hua Hong vs. Auto Trader Group | Hua Hong vs. MARKET VECTR RETAIL | Hua Hong vs. PennantPark Investment |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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