Correlation Between BizLink Holding and Hota Industrial
Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Hota Industrial 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 BizLink Holding and Hota Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Hota Industrial Mfg, you can compare the effects of market volatilities on BizLink Holding and Hota Industrial 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 BizLink Holding with a short position of Hota Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Hota Industrial.
Diversification Opportunities for BizLink Holding and Hota Industrial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BizLink and Hota is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Hota Industrial Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hota Industrial Mfg and BizLink Holding 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 BizLink Holding are associated (or correlated) with Hota Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hota Industrial Mfg has no effect on the direction of BizLink Holding i.e., BizLink Holding and Hota Industrial go up and down completely randomly.
Pair Corralation between BizLink Holding and Hota Industrial
Assuming the 90 days trading horizon BizLink Holding is expected to generate 1.06 times more return on investment than Hota Industrial. However, BizLink Holding is 1.06 times more volatile than Hota Industrial Mfg. It trades about 0.14 of its potential returns per unit of risk. Hota Industrial Mfg is currently generating about 0.02 per unit of risk. If you would invest 25,600 in BizLink Holding on September 1, 2024 and sell it today you would earn a total of 39,100 from holding BizLink Holding or generate 152.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
BizLink Holding vs. Hota Industrial Mfg
Performance |
| Timeline |
| BizLink Holding |
| Hota Industrial Mfg |
BizLink Holding and Hota Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BizLink Holding and Hota Industrial
The main advantage of trading using opposite BizLink Holding and Hota Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Hota Industrial 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 Hota Industrial will offset losses from the drop in Hota Industrial's long position.| BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
| Hota Industrial vs. Chaintech Technology Corp | Hota Industrial vs. AVerMedia Technologies | Hota Industrial vs. Avision | Hota Industrial vs. Clevo 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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