Correlation Between Globaltek Fabrication and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both Globaltek Fabrication and Hiwin Technologies 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 Globaltek Fabrication and Hiwin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globaltek Fabrication Co and Hiwin Technologies Corp, you can compare the effects of market volatilities on Globaltek Fabrication and Hiwin Technologies 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 Globaltek Fabrication with a short position of Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globaltek Fabrication and Hiwin Technologies.
Diversification Opportunities for Globaltek Fabrication and Hiwin Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globaltek and Hiwin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Globaltek Fabrication Co and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp and Globaltek Fabrication 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 Globaltek Fabrication Co are associated (or correlated) with Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of Globaltek Fabrication i.e., Globaltek Fabrication and Hiwin Technologies go up and down completely randomly.
Pair Corralation between Globaltek Fabrication and Hiwin Technologies
Assuming the 90 days trading horizon Globaltek Fabrication Co is expected to generate 1.76 times more return on investment than Hiwin Technologies. However, Globaltek Fabrication is 1.76 times more volatile than Hiwin Technologies Corp. It trades about 0.09 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.01 per unit of risk. If you would invest 4,995 in Globaltek Fabrication Co on September 3, 2024 and sell it today you would earn a total of 2,745 from holding Globaltek Fabrication Co or generate 54.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globaltek Fabrication Co vs. Hiwin Technologies Corp
Performance |
| Timeline |
| Globaltek Fabrication |
| Hiwin Technologies Corp |
Globaltek Fabrication and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globaltek Fabrication and Hiwin Technologies
The main advantage of trading using opposite Globaltek Fabrication and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globaltek Fabrication position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.| Globaltek Fabrication vs. SCI Pharmtech | Globaltek Fabrication vs. ZongTai Real Estate | Globaltek Fabrication vs. Ying Han Technology | Globaltek Fabrication vs. Tripod Technology Corp |
| Hiwin Technologies vs. Universal Microelectronics Co | Hiwin Technologies vs. AVerMedia Technologies | Hiwin Technologies vs. Symtek Automation Asia | Hiwin Technologies vs. WiseChip Semiconductor |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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