Correlation Between Hung Sheng and Taigen Biopharmaceutica

Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Taigen Biopharmaceutica 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 Taigen Biopharmaceutica 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 Taigen Biopharmaceuticals Holdings, you can compare the effects of market volatilities on Hung Sheng and Taigen Biopharmaceutica 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 Taigen Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Taigen Biopharmaceutica.

Diversification Opportunities for Hung Sheng and Taigen Biopharmaceutica

0.33

Correlation Coefficient

Hung Sheng  Taigen Biopharmaceutica

Weak diversification

The 3 months correlation between Hung and Taigen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Taigen Biopharmaceuticals Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taigen Biopharmaceutica 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 Taigen Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taigen Biopharmaceutica has no effect on the direction of Hung Sheng i.e., Hung Sheng and Taigen Biopharmaceutica go up and down completely randomly.

Pair Corralation between Hung Sheng and Taigen Biopharmaceutica

Assuming the 90 days trading horizon Hung Sheng is expected to generate 1.43 times less return on investment than Taigen Biopharmaceutica. But when comparing it to its historical volatility, Hung Sheng Construction is 1.52 times less risky than Taigen Biopharmaceutica. It trades about 0.05 of its potential returns per unit of risk. Taigen Biopharmaceuticals Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,085  in Taigen Biopharmaceuticals Holdings on December 22, 2024 and sell it today you would earn a total of  55.00  from holding Taigen Biopharmaceuticals Holdings or generate 5.07% return on investment over 90 days.

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

Hung Sheng Construction  vs.  Taigen Biopharmaceuticals Hold

Hung Sheng Construction

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hung Sheng Construction are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hung Sheng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Taigen Biopharmaceutica

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taigen Biopharmaceuticals Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taigen Biopharmaceutica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hung Sheng and Taigen Biopharmaceutica

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

The idea behind Hung Sheng Construction and Taigen Biopharmaceuticals Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.