Correlation Between Hung Sheng and Ok Biotech
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Ok Biotech 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 Sheng and Ok Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Sheng Construction and Ok Biotech Co, you can compare the effects of market volatilities on Hung Sheng and Ok Biotech 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 Sheng with a short position of Ok Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Ok Biotech.
Diversification Opportunities for Hung Sheng and Ok Biotech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hung and 4155 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Ok Biotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ok Biotech and Hung Sheng 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 Sheng Construction are associated (or correlated) with Ok Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ok Biotech has no effect on the direction of Hung Sheng i.e., Hung Sheng and Ok Biotech go up and down completely randomly.
Pair Corralation between Hung Sheng and Ok Biotech
Assuming the 90 days trading horizon Hung Sheng Construction is expected to under-perform the Ok Biotech. In addition to that, Hung Sheng is 1.33 times more volatile than Ok Biotech Co. It trades about -0.07 of its total potential returns per unit of risk. Ok Biotech Co is currently generating about -0.02 per unit of volatility. If you would invest 2,210 in Ok Biotech Co on December 5, 2024 and sell it today you would lose (40.00) from holding Ok Biotech Co or give up 1.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hung Sheng Construction vs. Ok Biotech Co
Performance |
Timeline |
Hung Sheng Construction |
Ok Biotech |
Hung Sheng and Ok Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hung Sheng and Ok Biotech
The main advantage of trading using opposite Hung Sheng and Ok Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Ok Biotech 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 Ok Biotech will offset losses from the drop in Ok Biotech's long position.Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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