Correlation Between I Hwa and Hung Chou
Can any of the company-specific risk be diversified away by investing in both I Hwa and Hung Chou 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 I Hwa and Hung Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Hwa Industrial Co and Hung Chou Fiber, you can compare the effects of market volatilities on I Hwa and Hung Chou 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 I Hwa with a short position of Hung Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Hwa and Hung Chou.
Diversification Opportunities for I Hwa and Hung Chou
Very good diversification
The 3 months correlation between 1456 and Hung is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding I Hwa Industrial Co and Hung Chou Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Chou Fiber and I Hwa 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 I Hwa Industrial Co are associated (or correlated) with Hung Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Chou Fiber has no effect on the direction of I Hwa i.e., I Hwa and Hung Chou go up and down completely randomly.
Pair Corralation between I Hwa and Hung Chou
Assuming the 90 days trading horizon I Hwa is expected to generate 1.24 times less return on investment than Hung Chou. In addition to that, I Hwa is 1.67 times more volatile than Hung Chou Fiber. It trades about 0.02 of its total potential returns per unit of risk. Hung Chou Fiber is currently generating about 0.04 per unit of volatility. If you would invest 913.00 in Hung Chou Fiber on September 2, 2024 and sell it today you would earn a total of 172.00 from holding Hung Chou Fiber or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Hwa Industrial Co vs. Hung Chou Fiber
Performance |
| Timeline |
| I Hwa Industrial |
| Hung Chou Fiber |
I Hwa and Hung Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Hwa and Hung Chou
The main advantage of trading using opposite I Hwa and Hung Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Hwa position performs unexpectedly, Hung Chou 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 Hung Chou will offset losses from the drop in Hung Chou's long position.| I Hwa vs. Chaintech Technology Corp | I Hwa vs. Avision | I Hwa vs. Clevo Co | I Hwa vs. Elitegroup Computer Systems |
| Hung Chou vs. Wei Chuan Foods | Hung Chou vs. Standard Foods Corp | Hung Chou vs. Sunfar Computer Co | Hung Chou vs. RiTdisplay Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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