Correlation Between Hon Hai and Analog Integrations
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Analog Integrations 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 Analog Integrations 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 Analog Integrations, you can compare the effects of market volatilities on Hon Hai and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Analog Integrations.
Diversification Opportunities for Hon Hai and Analog Integrations
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hon and Analog is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of Hon Hai i.e., Hon Hai and Analog Integrations go up and down completely randomly.
Pair Corralation between Hon Hai and Analog Integrations
Assuming the 90 days trading horizon Hon Hai is expected to generate 2.4 times less return on investment than Analog Integrations. But when comparing it to its historical volatility, Hon Hai Precision is 1.53 times less risky than Analog Integrations. It trades about 0.13 of its potential returns per unit of risk. Analog Integrations is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,350 in Analog Integrations on December 1, 2024 and sell it today you would earn a total of 1,200 from holding Analog Integrations or generate 12.83% 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. Analog Integrations
Performance |
| Timeline |
| Hon Hai Precision |
| Analog Integrations |
Hon Hai and Analog Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Analog Integrations
The main advantage of trading using opposite Hon Hai and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' long position.| Hon Hai vs. United Microelectronics | Hon Hai vs. MediaTek | Hon Hai vs. Chunghwa Telecom Co | Hon Hai vs. Delta Electronics |
| Analog Integrations vs. Cathay Chemical Works | Analog Integrations vs. Ho Tung Chemical | Analog Integrations vs. Central Reinsurance Corp | Analog Integrations vs. Shinkong Insurance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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