Correlation Between Microelectronics and HIM International
Can any of the company-specific risk be diversified away by investing in both Microelectronics and HIM International 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 HIM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and HIM International Music, you can compare the effects of market volatilities on Microelectronics and HIM International 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 HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and HIM International.
Diversification Opportunities for Microelectronics and HIM International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microelectronics and HIM is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music 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 HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of Microelectronics i.e., Microelectronics and HIM International go up and down completely randomly.
Pair Corralation between Microelectronics and HIM International
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the HIM International. In addition to that, Microelectronics is 1.73 times more volatile than HIM International Music. It trades about -0.02 of its total potential returns per unit of risk. HIM International Music is currently generating about 0.07 per unit of volatility. If you would invest 10,058 in HIM International Music on August 27, 2024 and sell it today you would earn a total of 2,492 from holding HIM International Music or generate 24.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. HIM International Music
Performance |
| Timeline |
| Microelectronics Tec |
| HIM International Music |
Microelectronics and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and HIM International
The main advantage of trading using opposite Microelectronics and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, HIM International 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 HIM International will offset losses from the drop in HIM International's long position.| Microelectronics vs. Novatek Microelectronics Corp | Microelectronics vs. Quanta Computer | Microelectronics vs. United Microelectronics |
| HIM International vs. Syntek Semiconductor Co | HIM International vs. Leader Electronics | HIM International vs. Excellence Optoelectronic | HIM International vs. Microelectronics Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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