Correlation Between Microelectronics and Hsinli Chemical
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Hsinli Chemical 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 Microelectronics and Hsinli Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Hsinli Chemical Industrial, you can compare the effects of market volatilities on Microelectronics and Hsinli Chemical 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 Microelectronics with a short position of Hsinli Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Hsinli Chemical.
Diversification Opportunities for Microelectronics and Hsinli Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microelectronics and Hsinli is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Hsinli Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinli Chemical Indu and Microelectronics 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 Microelectronics Technology are associated (or correlated) with Hsinli Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinli Chemical Indu has no effect on the direction of Microelectronics i.e., Microelectronics and Hsinli Chemical go up and down completely randomly.
Pair Corralation between Microelectronics and Hsinli Chemical
Assuming the 90 days trading horizon Microelectronics Technology is expected to generate 2.19 times more return on investment than Hsinli Chemical. However, Microelectronics is 2.19 times more volatile than Hsinli Chemical Industrial. It trades about 0.2 of its potential returns per unit of risk. Hsinli Chemical Industrial is currently generating about 0.01 per unit of risk. If you would invest 3,060 in Microelectronics Technology on October 12, 2024 and sell it today you would earn a total of 530.00 from holding Microelectronics Technology or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Hsinli Chemical Industrial
Performance |
| Timeline |
| Microelectronics Tec |
| Hsinli Chemical Indu |
Microelectronics and Hsinli Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Hsinli Chemical
The main advantage of trading using opposite Microelectronics and Hsinli Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Hsinli Chemical 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 Hsinli Chemical will offset losses from the drop in Hsinli Chemical's long position.| Microelectronics vs. D Link Corp | Microelectronics vs. Accton Technology Corp | Microelectronics vs. Macronix International Co | Microelectronics vs. Ritek Corp |
| Hsinli Chemical vs. Microelectronics Technology | Hsinli Chemical vs. Intai Technology | Hsinli Chemical vs. Pontex Polyblend CoLtd | Hsinli Chemical vs. Aker Technology Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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