Correlation Between Nien Hsing and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Nien Hsing and Hunya Foods 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 Nien Hsing and Hunya Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nien Hsing Textile and Hunya Foods Co, you can compare the effects of market volatilities on Nien Hsing and Hunya Foods 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 Nien Hsing with a short position of Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nien Hsing and Hunya Foods.
Diversification Opportunities for Nien Hsing and Hunya Foods
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nien and Hunya is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nien Hsing Textile and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods and Nien Hsing 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 Nien Hsing Textile are associated (or correlated) with Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Nien Hsing i.e., Nien Hsing and Hunya Foods go up and down completely randomly.
Pair Corralation between Nien Hsing and Hunya Foods
Assuming the 90 days trading horizon Nien Hsing Textile is expected to under-perform the Hunya Foods. But the stock apears to be less risky and, when comparing its historical volatility, Nien Hsing Textile is 1.31 times less risky than Hunya Foods. The stock trades about 0.0 of its potential returns per unit of risk. The Hunya Foods Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,165 in Hunya Foods Co on August 29, 2024 and sell it today you would earn a total of 160.00 from holding Hunya Foods Co or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Nien Hsing Textile vs. Hunya Foods Co
Performance |
| Timeline |
| Nien Hsing Textile |
| Hunya Foods |
Nien Hsing and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nien Hsing and Hunya Foods
The main advantage of trading using opposite Nien Hsing and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nien Hsing position performs unexpectedly, Hunya Foods 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.| Nien Hsing vs. Tainan Enterprises Co | Nien Hsing vs. De Licacy Industrial | Nien Hsing vs. Taiwan Styrene Monomer | Nien Hsing vs. Kaulin Mfg |
| Hunya Foods vs. AGV Products Corp | Hunya Foods vs. Taisun Enterprise Co | Hunya Foods vs. De Licacy Industrial | Hunya Foods vs. Wisher Industrial Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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