Correlation Between Hi Sharp and Alcor Micro
Can any of the company-specific risk be diversified away by investing in both Hi Sharp and Alcor Micro 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 Hi Sharp and Alcor Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Sharp Electronics and Alcor Micro, you can compare the effects of market volatilities on Hi Sharp and Alcor Micro 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 Hi Sharp with a short position of Alcor Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Sharp and Alcor Micro.
Diversification Opportunities for Hi Sharp and Alcor Micro
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 3128 and Alcor is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hi Sharp Electronics and Alcor Micro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcor Micro and Hi Sharp 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 Hi Sharp Electronics are associated (or correlated) with Alcor Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcor Micro has no effect on the direction of Hi Sharp i.e., Hi Sharp and Alcor Micro go up and down completely randomly.
Pair Corralation between Hi Sharp and Alcor Micro
Assuming the 90 days trading horizon Hi Sharp is expected to generate 6.7 times less return on investment than Alcor Micro. But when comparing it to its historical volatility, Hi Sharp Electronics is 5.75 times less risky than Alcor Micro. It trades about 0.13 of its potential returns per unit of risk. Alcor Micro is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 12,800 in Alcor Micro on September 12, 2024 and sell it today you would earn a total of 1,600 from holding Alcor Micro or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Sharp Electronics vs. Alcor Micro
Performance |
| Timeline |
| Hi Sharp Electronics |
| Alcor Micro |
Hi Sharp and Alcor Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Sharp and Alcor Micro
The main advantage of trading using opposite Hi Sharp and Alcor Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Sharp position performs unexpectedly, Alcor Micro 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 Alcor Micro will offset losses from the drop in Alcor Micro's long position.The idea behind Hi Sharp Electronics and Alcor Micro pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alcor Micro vs. Cayman Tung Ling | Alcor Micro vs. Hsing Ta Cement | Alcor Micro vs. Bank of Kaohsiung | Alcor Micro vs. Hi Sharp Electronics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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