Correlation Between BizLink Holding and Hu Lane
Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Hu Lane 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 Hu Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Hu Lane Associate, you can compare the effects of market volatilities on BizLink Holding and Hu Lane 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 Hu Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Hu Lane.
Diversification Opportunities for BizLink Holding and Hu Lane
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BizLink and 6279 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Hu Lane Associate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hu Lane Associate 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 Hu Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hu Lane Associate has no effect on the direction of BizLink Holding i.e., BizLink Holding and Hu Lane go up and down completely randomly.
Pair Corralation between BizLink Holding and Hu Lane
Assuming the 90 days trading horizon BizLink Holding is expected to generate 0.49 times more return on investment than Hu Lane. However, BizLink Holding is 2.02 times less risky than Hu Lane. It trades about 0.08 of its potential returns per unit of risk. Hu Lane Associate is currently generating about 0.03 per unit of risk. If you would invest 28,200 in BizLink Holding on November 27, 2024 and sell it today you would earn a total of 37,200 from holding BizLink Holding or generate 131.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BizLink Holding vs. Hu Lane Associate
Performance |
| Timeline |
| BizLink Holding |
| Hu Lane Associate |
BizLink Holding and Hu Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BizLink Holding and Hu Lane
The main advantage of trading using opposite BizLink Holding and Hu Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Hu Lane 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 Hu Lane will offset losses from the drop in Hu Lane'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 |
| Hu Lane vs. BizLink Holding | Hu Lane vs. Hota Industrial Mfg | Hu Lane vs. Tung Thih Electronic | Hu Lane vs. Actron Technology |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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