Correlation Between Arbor Technology and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Arbor Technology and Huang Hsiang 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 Arbor Technology and Huang Hsiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Technology and Huang Hsiang Construction, you can compare the effects of market volatilities on Arbor Technology and Huang Hsiang 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 Arbor Technology with a short position of Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Technology and Huang Hsiang.
Diversification Opportunities for Arbor Technology and Huang Hsiang
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arbor and Huang is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Technology and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction and Arbor Technology 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 Arbor Technology are associated (or correlated) with Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Arbor Technology i.e., Arbor Technology and Huang Hsiang go up and down completely randomly.
Pair Corralation between Arbor Technology and Huang Hsiang
Assuming the 90 days trading horizon Arbor Technology is expected to generate 1.92 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, Arbor Technology is 1.04 times less risky than Huang Hsiang. It trades about 0.29 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 5,830 in Huang Hsiang Construction on August 26, 2024 and sell it today you would earn a total of 1,940 from holding Huang Hsiang Construction or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Technology vs. Huang Hsiang Construction
Performance |
| Timeline |
| Arbor Technology |
| Huang Hsiang Construction |
Arbor Technology and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Technology and Huang Hsiang
The main advantage of trading using opposite Arbor Technology and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Technology position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Arbor Technology vs. Advantech Co | Arbor Technology vs. Asustek Computer | Arbor Technology vs. Lite On Technology Corp | Arbor Technology vs. Micro Star International Co |
| Huang Hsiang vs. Chainqui Construction Development | Huang Hsiang vs. Zinwell | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang vs. CTCI Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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