Correlation Between Hong Ho and Poya International
Can any of the company-specific risk be diversified away by investing in both Hong Ho and Poya International 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 Hong Ho and Poya International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Ho Precision and Poya International Co, you can compare the effects of market volatilities on Hong Ho and Poya International 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 Hong Ho with a short position of Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Ho and Poya International.
Diversification Opportunities for Hong Ho and Poya International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hong and Poya is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hong Ho Precision and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International and Hong Ho 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 Hong Ho Precision are associated (or correlated) with Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Hong Ho i.e., Hong Ho and Poya International go up and down completely randomly.
Pair Corralation between Hong Ho and Poya International
Assuming the 90 days trading horizon Hong Ho Precision is expected to generate 3.11 times more return on investment than Poya International. However, Hong Ho is 3.11 times more volatile than Poya International Co. It trades about 0.02 of its potential returns per unit of risk. Poya International Co is currently generating about -0.15 per unit of risk. If you would invest 4,775 in Hong Ho Precision on September 12, 2024 and sell it today you would lose (10.00) from holding Hong Ho Precision or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Ho Precision vs. Poya International Co
Performance |
| Timeline |
| Hong Ho Precision |
| Poya International |
Hong Ho and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Ho and Poya International
The main advantage of trading using opposite Hong Ho and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Ho position performs unexpectedly, Poya International 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 Poya International will offset losses from the drop in Poya International's long position.| Hong Ho vs. Everest Textile Co | Hong Ho vs. Hong Yi Fiber | Hong Ho vs. Yi Jinn Industrial | Hong Ho vs. Carnival Industrial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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