Correlation Between Hua Hong and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on Hua Hong and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Charter Communications.
Diversification Opportunities for Hua Hong and Charter Communications
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hua and Charter is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Hua Hong i.e., Hua Hong and Charter Communications go up and down completely randomly.
Pair Corralation between Hua Hong and Charter Communications
Assuming the 90 days horizon Hua Hong is expected to generate 2.92 times less return on investment than Charter Communications. In addition to that, Hua Hong is 1.66 times more volatile than Charter Communications. It trades about 0.0 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.01 per unit of volatility. If you would invest 35,500 in Charter Communications on October 11, 2024 and sell it today you would lose (1,905) from holding Charter Communications or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Charter Communications
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Charter Communications |
Hua Hong and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Charter Communications
The main advantage of trading using opposite Hua Hong and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Hua Hong vs. Electronic Arts | Hua Hong vs. Nucletron Electronic Aktiengesellschaft | Hua Hong vs. STMICROELECTRONICS | Hua Hong vs. Inspire Medical Systems |
| Charter Communications vs. Hua Hong Semiconductor | Charter Communications vs. Elmos Semiconductor SE | Charter Communications vs. MagnaChip Semiconductor Corp | Charter Communications vs. JLF INVESTMENT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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