Correlation Between Hanpin Electron and Feng Tay
Can any of the company-specific risk be diversified away by investing in both Hanpin Electron and Feng Tay 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 Hanpin Electron and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanpin Electron Co and Feng Tay Enterprises, you can compare the effects of market volatilities on Hanpin Electron and Feng Tay 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 Hanpin Electron with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanpin Electron and Feng Tay.
Diversification Opportunities for Hanpin Electron and Feng Tay
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanpin and Feng is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hanpin Electron Co and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Hanpin Electron 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 Hanpin Electron Co are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Hanpin Electron i.e., Hanpin Electron and Feng Tay go up and down completely randomly.
Pair Corralation between Hanpin Electron and Feng Tay
Assuming the 90 days trading horizon Hanpin Electron Co is expected to generate 1.03 times more return on investment than Feng Tay. However, Hanpin Electron is 1.03 times more volatile than Feng Tay Enterprises. It trades about 0.09 of its potential returns per unit of risk. Feng Tay Enterprises is currently generating about -0.04 per unit of risk. If you would invest 3,415 in Hanpin Electron Co on September 12, 2024 and sell it today you would earn a total of 2,225 from holding Hanpin Electron Co or generate 65.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Hanpin Electron Co vs. Feng Tay Enterprises
Performance |
| Timeline |
| Hanpin Electron |
| Feng Tay Enterprises |
Hanpin Electron and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanpin Electron and Feng Tay
The main advantage of trading using opposite Hanpin Electron and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanpin Electron position performs unexpectedly, Feng Tay 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 Feng Tay will offset losses from the drop in Feng Tay's long position.| Hanpin Electron vs. Feng Tay Enterprises | Hanpin Electron vs. Ruentex Development Co | Hanpin Electron vs. WiseChip Semiconductor | Hanpin Electron vs. Novatek Microelectronics Corp |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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