Correlation Between Hua Hong and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Hua Hong and KRISPY KREME 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 KRISPY KREME 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 KRISPY KREME DL 01, you can compare the effects of market volatilities on Hua Hong and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and KRISPY KREME.
Diversification Opportunities for Hua Hong and KRISPY KREME
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hua and KRISPY is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of Hua Hong i.e., Hua Hong and KRISPY KREME go up and down completely randomly.
Pair Corralation between Hua Hong and KRISPY KREME
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 2.18 times more return on investment than KRISPY KREME. However, Hua Hong is 2.18 times more volatile than KRISPY KREME DL 01. It trades about 0.2 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.31 per unit of risk. If you would invest 262.00 in Hua Hong Semiconductor on October 23, 2024 and sell it today you would earn a total of 30.00 from holding Hua Hong Semiconductor or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Hua Hong Semiconductor |
| KRISPY KREME DL |
Hua Hong and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and KRISPY KREME
The main advantage of trading using opposite Hua Hong and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| Hua Hong vs. WillScot Mobile Mini | Hua Hong vs. PLAYWAY SA ZY 10 | Hua Hong vs. GEELY AUTOMOBILE | Hua Hong vs. PLAY2CHILL SA ZY |
| KRISPY KREME vs. MagnaChip Semiconductor Corp | KRISPY KREME vs. Hua Hong Semiconductor | KRISPY KREME vs. Taiwan Semiconductor Manufacturing | KRISPY KREME vs. TYSON FOODS A |
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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