Correlation Between Hua Hong and LANDSEA GREEN
Can any of the company-specific risk be diversified away by investing in both Hua Hong and LANDSEA GREEN 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 Hua Hong and LANDSEA GREEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and LANDSEA GREEN MANAGEMENT, you can compare the effects of market volatilities on Hua Hong and LANDSEA GREEN 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 Hua Hong with a short position of LANDSEA GREEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and LANDSEA GREEN.
Diversification Opportunities for Hua Hong and LANDSEA GREEN
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hua and LANDSEA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and LANDSEA GREEN MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA GREEN MANAGEMENT and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with LANDSEA GREEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA GREEN MANAGEMENT has no effect on the direction of Hua Hong i.e., Hua Hong and LANDSEA GREEN go up and down completely randomly.
Pair Corralation between Hua Hong and LANDSEA GREEN
Assuming the 90 days horizon Hua Hong is expected to generate 64.95 times less return on investment than LANDSEA GREEN. But when comparing it to its historical volatility, Hua Hong Semiconductor is 30.24 times less risky than LANDSEA GREEN. It trades about 0.06 of its potential returns per unit of risk. LANDSEA GREEN MANAGEMENT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.10 in LANDSEA GREEN MANAGEMENT on November 3, 2024 and sell it today you would earn a total of 0.00 from holding LANDSEA GREEN MANAGEMENT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. LANDSEA GREEN MANAGEMENT
Performance |
| Timeline |
| Hua Hong Semiconductor |
| LANDSEA GREEN MANAGEMENT |
Hua Hong and LANDSEA GREEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and LANDSEA GREEN
The main advantage of trading using opposite Hua Hong and LANDSEA GREEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, LANDSEA GREEN 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 LANDSEA GREEN will offset losses from the drop in LANDSEA GREEN's long position.| Hua Hong vs. Sunny Optical Technology | Hua Hong vs. United States Steel | Hua Hong vs. Olympic Steel | Hua Hong vs. COSMOSTEEL HLDGS |
| LANDSEA GREEN vs. CENTURIA OFFICE REIT | LANDSEA GREEN vs. KENEDIX OFFICE INV | LANDSEA GREEN vs. Thai Beverage Public | LANDSEA GREEN vs. The Boston Beer |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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