Correlation Between Hon Hai and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Apex Biotechnology 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 Hon Hai and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hon Hai Precision and Apex Biotechnology Corp, you can compare the effects of market volatilities on Hon Hai and Apex Biotechnology 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 Hon Hai with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Apex Biotechnology.
Diversification Opportunities for Hon Hai and Apex Biotechnology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hon and Apex is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Hon Hai 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 Hon Hai Precision are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Hon Hai i.e., Hon Hai and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Hon Hai and Apex Biotechnology
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 1.12 times more return on investment than Apex Biotechnology. However, Hon Hai is 1.12 times more volatile than Apex Biotechnology Corp. It trades about 0.09 of its potential returns per unit of risk. Apex Biotechnology Corp is currently generating about 0.02 per unit of risk. If you would invest 9,635 in Hon Hai Precision on September 3, 2024 and sell it today you would earn a total of 9,915 from holding Hon Hai Precision or generate 102.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Hon Hai Precision |
| Apex Biotechnology Corp |
Hon Hai and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Apex Biotechnology
The main advantage of trading using opposite Hon Hai and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Hon Hai vs. United Microelectronics | Hon Hai vs. MediaTek | Hon Hai vs. Chunghwa Telecom Co | Hon Hai vs. Delta Electronics |
| Apex Biotechnology vs. Sinphar Pharmaceutical Co | Apex Biotechnology vs. WiseChip Semiconductor | Apex Biotechnology vs. Novatek Microelectronics Corp | Apex Biotechnology vs. Leader Electronics |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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