Correlation Between Hon Hai and Dimerco Data
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Dimerco Data 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 Dimerco Data 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 Dimerco Data System, you can compare the effects of market volatilities on Hon Hai and Dimerco Data 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 Dimerco Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Dimerco Data.
Diversification Opportunities for Hon Hai and Dimerco Data
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hon and Dimerco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Dimerco Data System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimerco Data System 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 Dimerco Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimerco Data System has no effect on the direction of Hon Hai i.e., Hon Hai and Dimerco Data go up and down completely randomly.
Pair Corralation between Hon Hai and Dimerco Data
Assuming the 90 days trading horizon Hon Hai Precision is expected to under-perform the Dimerco Data. In addition to that, Hon Hai is 1.38 times more volatile than Dimerco Data System. It trades about -0.16 of its total potential returns per unit of risk. Dimerco Data System is currently generating about 0.08 per unit of volatility. If you would invest 11,500 in Dimerco Data System on October 26, 2024 and sell it today you would earn a total of 700.00 from holding Dimerco Data System or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Dimerco Data System
Performance |
| Timeline |
| Hon Hai Precision |
| Dimerco Data System |
Hon Hai and Dimerco Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Dimerco Data
The main advantage of trading using opposite Hon Hai and Dimerco Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Dimerco Data 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 Dimerco Data will offset losses from the drop in Dimerco Data's long position.| Hon Hai vs. United Microelectronics | Hon Hai vs. MediaTek | Hon Hai vs. Chunghwa Telecom Co | Hon Hai vs. Delta Electronics |
| Dimerco Data vs. Syscom Computer Engineering | Dimerco Data vs. U Ming Marine Transport | Dimerco Data vs. Far EasTone Telecommunications | Dimerco Data vs. Jetwell Computer 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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