Correlation Between Xavis and HANA Micron
Can any of the company-specific risk be diversified away by investing in both Xavis and HANA Micron 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 Xavis and HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and HANA Micron, you can compare the effects of market volatilities on Xavis and HANA Micron 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 Xavis with a short position of HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and HANA Micron.
Diversification Opportunities for Xavis and HANA Micron
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xavis and HANA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron and Xavis 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 Xavis Co are associated (or correlated) with HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of Xavis i.e., Xavis and HANA Micron go up and down completely randomly.
Pair Corralation between Xavis and HANA Micron
Assuming the 90 days trading horizon Xavis Co is expected to generate 1.95 times more return on investment than HANA Micron. However, Xavis is 1.95 times more volatile than HANA Micron. It trades about 0.12 of its potential returns per unit of risk. HANA Micron is currently generating about 0.1 per unit of risk. If you would invest 143,000 in Xavis Co on December 1, 2024 and sell it today you would earn a total of 19,800 from holding Xavis Co or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xavis Co vs. HANA Micron
Performance |
| Timeline |
| Xavis |
| HANA Micron |
Xavis and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and HANA Micron
The main advantage of trading using opposite Xavis and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron's long position.| Xavis vs. Haitai Confectionery Foods | Xavis vs. Korean Reinsurance Co | Xavis vs. Shinhan Inverse Silver | Xavis vs. Digital Imaging Technology |
| HANA Micron vs. Samsung Electronics Co | HANA Micron vs. Samsung Electronics Co | HANA Micron vs. SK Hynix | HANA Micron vs. HMM 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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