Correlation Between United Security and Hang Seng
Can any of the company-specific risk be diversified away by investing in both United Security 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 United Security and Hang Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Security Bancshares and Hang Seng Bank, you can compare the effects of market volatilities on United Security 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 United Security with a short position of Hang Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Security and Hang Seng.
Diversification Opportunities for United Security and Hang Seng
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Hang is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Security Bancshares 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 United Security 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 United Security Bancshares 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 United Security i.e., United Security and Hang Seng go up and down completely randomly.
Pair Corralation between United Security and Hang Seng
Given the investment horizon of 90 days United Security Bancshares is expected to under-perform the Hang Seng. In addition to that, United Security is 1.02 times more volatile than Hang Seng Bank. It trades about -0.08 of its total potential returns per unit of risk. Hang Seng Bank is currently generating about 0.16 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Security Bancshares vs. Hang Seng Bank
Performance |
| Timeline |
| United Security Banc |
| Hang Seng Bank |
United Security and Hang Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Security and Hang Seng
The main advantage of trading using opposite United Security and Hang Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Security 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.| United Security vs. Home Federal Bancorp | United Security vs. Lake Shore Bancorp | United Security vs. Community West Bancshares | United Security vs. First Northwest Bancorp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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