Correlation Between Golden Biotechnology and Hannstar Display
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Hannstar Display 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 Golden Biotechnology and Hannstar Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Hannstar Display Corp, you can compare the effects of market volatilities on Golden Biotechnology and Hannstar Display 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 Golden Biotechnology with a short position of Hannstar Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Hannstar Display.
Diversification Opportunities for Golden Biotechnology and Hannstar Display
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Hannstar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Hannstar Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannstar Display Corp and Golden Biotechnology 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 Golden Biotechnology are associated (or correlated) with Hannstar Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannstar Display Corp has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Hannstar Display go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Hannstar Display
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Hannstar Display. But the stock apears to be less risky and, when comparing its historical volatility, Golden Biotechnology is 1.16 times less risky than Hannstar Display. The stock trades about -0.35 of its potential returns per unit of risk. The Hannstar Display Corp is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 910.00 in Hannstar Display Corp on August 30, 2024 and sell it today you would lose (38.00) from holding Hannstar Display Corp or give up 4.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Biotechnology vs. Hannstar Display Corp
Performance |
| Timeline |
| Golden Biotechnology |
| Hannstar Display Corp |
Golden Biotechnology and Hannstar Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Biotechnology and Hannstar Display
The main advantage of trading using opposite Golden Biotechnology and Hannstar Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Hannstar Display 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 Hannstar Display will offset losses from the drop in Hannstar Display's long position.| Golden Biotechnology vs. Forest Water Environmental | Golden Biotechnology vs. Sesoda Corp | Golden Biotechnology vs. Loop Telecommunication International | Golden Biotechnology vs. Tai Tung Communication |
| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Winbond Electronics Corp | Hannstar Display vs. Qisda 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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