Correlation Between Hurum and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hurum and ABOV Semiconductor 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 Hurum and ABOV Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and ABOV Semiconductor Co, you can compare the effects of market volatilities on Hurum and ABOV Semiconductor 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 Hurum with a short position of ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and ABOV Semiconductor.
Diversification Opportunities for Hurum and ABOV Semiconductor
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hurum and ABOV is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor and Hurum 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 Hurum Co are associated (or correlated) with ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of Hurum i.e., Hurum and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between Hurum and ABOV Semiconductor
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.65 times more return on investment than ABOV Semiconductor. However, Hurum Co is 1.53 times less risky than ABOV Semiconductor. It trades about -0.1 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.07 per unit of risk. If you would invest 102,100 in Hurum Co on September 2, 2024 and sell it today you would lose (31,600) from holding Hurum Co or give up 30.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. ABOV Semiconductor Co
Performance |
| Timeline |
| Hurum |
| ABOV Semiconductor |
Hurum and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and ABOV Semiconductor
The main advantage of trading using opposite Hurum and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| Hurum vs. Samsung Electronics Co | Hurum vs. Samsung Electronics Co | Hurum vs. LG Energy Solution | Hurum vs. SK Hynix |
| ABOV Semiconductor vs. Dongsin Engineering Construction | ABOV Semiconductor vs. Doosan Fuel Cell | ABOV Semiconductor vs. Daishin Balance 1 | ABOV Semiconductor vs. Total Soft Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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