Correlation Between Hi Lai and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Hi Lai and Arbor Technology 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 Arbor Technology 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 Arbor Technology, you can compare the effects of market volatilities on Hi Lai and Arbor Technology 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 Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and Arbor Technology.
Diversification Opportunities for Hi Lai and Arbor Technology
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1268 and Arbor is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Technology 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 Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Hi Lai i.e., Hi Lai and Arbor Technology go up and down completely randomly.
Pair Corralation between Hi Lai and Arbor Technology
Assuming the 90 days trading horizon Hi Lai is expected to generate 2.17 times less return on investment than Arbor Technology. But when comparing it to its historical volatility, Hi Lai Foods Co is 1.58 times less risky than Arbor Technology. It trades about 0.04 of its potential returns per unit of risk. Arbor Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,085 in Arbor Technology on October 30, 2024 and sell it today you would earn a total of 1,765 from holding Arbor Technology or generate 57.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. Arbor Technology
Performance |
| Timeline |
| Hi Lai Foods |
| Arbor Technology |
Hi Lai and Arbor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and Arbor Technology
The main advantage of trading using opposite Hi Lai and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, Arbor Technology 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.| Hi Lai vs. Century Iron And | Hi Lai vs. Chialin Precision Industrial | Hi Lai vs. Forest Water Environmental | Hi Lai vs. ECOVE Environment Corp |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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