Correlation Between Hi Lai and Macroblock
Can any of the company-specific risk be diversified away by investing in both Hi Lai and Macroblock 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 Hi Lai and Macroblock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and Macroblock, you can compare the effects of market volatilities on Hi Lai and Macroblock 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 Hi Lai with a short position of Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and Macroblock.
Diversification Opportunities for Hi Lai and Macroblock
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1268 and Macroblock is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Hi Lai i.e., Hi Lai and Macroblock go up and down completely randomly.
Pair Corralation between Hi Lai and Macroblock
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to generate 0.34 times more return on investment than Macroblock. However, Hi Lai Foods Co is 2.91 times less risky than Macroblock. It trades about -0.12 of its potential returns per unit of risk. Macroblock is currently generating about -0.28 per unit of risk. If you would invest 15,200 in Hi Lai Foods Co on September 14, 2024 and sell it today you would lose (150.00) from holding Hi Lai Foods Co or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. Macroblock
Performance |
| Timeline |
| Hi Lai Foods |
| Macroblock |
Hi Lai and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and Macroblock
The main advantage of trading using opposite Hi Lai and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.| Hi Lai vs. Trade Van Information Services | Hi Lai vs. Arbor Technology | Hi Lai vs. Promise Technology | Hi Lai vs. V Tac Technology Co |
| Macroblock vs. Holiday Entertainment Co | Macroblock vs. U Media Communications | Macroblock vs. Compal Broadband Networks | Macroblock vs. Asia Metal Industries |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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