Correlation Between Everlight Electronics and HIM International
Can any of the company-specific risk be diversified away by investing in both Everlight Electronics 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 Everlight Electronics and HIM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everlight Electronics Co and HIM International Music, you can compare the effects of market volatilities on Everlight Electronics 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 Everlight Electronics with a short position of HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everlight Electronics and HIM International.
Diversification Opportunities for Everlight Electronics and HIM International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Everlight and HIM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Everlight Electronics Co 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 Everlight Electronics 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 Everlight Electronics Co 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 Everlight Electronics i.e., Everlight Electronics and HIM International go up and down completely randomly.
Pair Corralation between Everlight Electronics and HIM International
Assuming the 90 days trading horizon Everlight Electronics Co is expected to generate 2.05 times more return on investment than HIM International. However, Everlight Electronics is 2.05 times more volatile than HIM International Music. It trades about 0.1 of its potential returns per unit of risk. HIM International Music is currently generating about -0.24 per unit of risk. If you would invest 8,100 in Everlight Electronics Co on October 13, 2024 and sell it today you would earn a total of 320.00 from holding Everlight Electronics Co or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everlight Electronics Co vs. HIM International Music
Performance |
| Timeline |
| Everlight Electronics |
| HIM International Music |
Everlight Electronics and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everlight Electronics and HIM International
The main advantage of trading using opposite Everlight Electronics and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everlight Electronics 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.| Everlight Electronics vs. Holy Stone Enterprise | Everlight Electronics vs. Walsin Technology Corp | Everlight Electronics vs. Yageo Corp | Everlight Electronics vs. HannStar Board Corp |
| HIM International vs. Everlight Electronics Co | HIM International vs. Sea Sonic Electronics | HIM International vs. Universal Microelectronics Co | HIM International vs. Loop Telecommunication International |
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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