Correlation Between Hung Ching and Sweeten Real

Can any of the company-specific risk be diversified away by investing in both Hung Ching and Sweeten Real 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 Hung Ching and Sweeten Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hung Ching Development and Sweeten Real Estate, you can compare the effects of market volatilities on Hung Ching and Sweeten Real 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 Hung Ching with a short position of Sweeten Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Ching and Sweeten Real.

Diversification Opportunities for Hung Ching and Sweeten Real

0.53

Correlation Coefficient

Hung Ching  Sweeten Real

Very weak diversification

The 3 months correlation between Hung and Sweeten is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hung Ching Development and Sweeten Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweeten Real Estate and Hung Ching 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 Hung Ching Development are associated (or correlated) with Sweeten Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweeten Real Estate has no effect on the direction of Hung Ching i.e., Hung Ching and Sweeten Real go up and down completely randomly.

Pair Corralation between Hung Ching and Sweeten Real

Assuming the 90 days trading horizon Hung Ching Development is expected to generate 2.01 times more return on investment than Sweeten Real. However, Hung Ching is 2.01 times more volatile than Sweeten Real Estate. It trades about -0.05 of its potential returns per unit of risk. Sweeten Real Estate is currently generating about -0.32 per unit of risk. If you would invest  3,910  in Hung Ching Development on October 10, 2024 and sell it today you would lose (120.00) from holding Hung Ching Development or give up 3.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hung Ching Development  vs.  Sweeten Real Estate

Hung Ching Development

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hung Ching Development are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hung Ching showed solid returns over the last few months and may actually be approaching a breakup point.

Sweeten Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweeten Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sweeten Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hung Ching and Sweeten Real

The main advantage of trading using opposite Hung Ching and Sweeten Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Ching position performs unexpectedly, Sweeten Real 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 Sweeten Real will offset losses from the drop in Sweeten Real's long position.

The idea behind Hung Ching Development and Sweeten Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.