Correlation Between Hiwin Technologies and Strong H
Can any of the company-specific risk be diversified away by investing in both Hiwin Technologies and Strong H 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 Hiwin Technologies and Strong H into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hiwin Technologies Corp and Strong H Machinery, you can compare the effects of market volatilities on Hiwin Technologies and Strong H 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 Hiwin Technologies with a short position of Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiwin Technologies and Strong H.
Diversification Opportunities for Hiwin Technologies and Strong H
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hiwin and Strong is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Technologies Corp and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery and Hiwin Technologies 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 Hiwin Technologies Corp are associated (or correlated) with Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Hiwin Technologies i.e., Hiwin Technologies and Strong H go up and down completely randomly.
Pair Corralation between Hiwin Technologies and Strong H
Assuming the 90 days trading horizon Hiwin Technologies Corp is expected to generate 2.31 times more return on investment than Strong H. However, Hiwin Technologies is 2.31 times more volatile than Strong H Machinery. It trades about 0.21 of its potential returns per unit of risk. Strong H Machinery is currently generating about 0.08 per unit of risk. If you would invest 22,600 in Hiwin Technologies Corp on October 17, 2024 and sell it today you would earn a total of 6,150 from holding Hiwin Technologies Corp or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hiwin Technologies Corp vs. Strong H Machinery
Performance |
| Timeline |
| Hiwin Technologies Corp |
| Strong H Machinery |
Hiwin Technologies and Strong H Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hiwin Technologies and Strong H
The main advantage of trading using opposite Hiwin Technologies and Strong H positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiwin Technologies position performs unexpectedly, Strong H 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 Strong H will offset losses from the drop in Strong H's long position.| Hiwin Technologies vs. Airtac International Group | Hiwin Technologies vs. Delta Electronics | Hiwin Technologies vs. LARGAN Precision Co | Hiwin Technologies vs. Advantech Co |
| Strong H vs. Hiwin Technologies Corp | Strong H vs. Brighton Best International Taiwan | Strong H vs. San Shing Fastech | Strong H vs. QST International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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