Correlation Between HannStar Board and Lien Chang
Can any of the company-specific risk be diversified away by investing in both HannStar Board and Lien Chang 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 HannStar Board and Lien Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HannStar Board Corp and Lien Chang Electronic, you can compare the effects of market volatilities on HannStar Board and Lien Chang 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 HannStar Board with a short position of Lien Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of HannStar Board and Lien Chang.
Diversification Opportunities for HannStar Board and Lien Chang
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HannStar and Lien is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and Lien Chang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Chang Electronic and HannStar Board 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 HannStar Board Corp are associated (or correlated) with Lien Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Chang Electronic has no effect on the direction of HannStar Board i.e., HannStar Board and Lien Chang go up and down completely randomly.
Pair Corralation between HannStar Board and Lien Chang
Assuming the 90 days trading horizon HannStar Board Corp is expected to generate 0.66 times more return on investment than Lien Chang. However, HannStar Board Corp is 1.51 times less risky than Lien Chang. It trades about 0.15 of its potential returns per unit of risk. Lien Chang Electronic is currently generating about 0.06 per unit of risk. If you would invest 5,020 in HannStar Board Corp on October 25, 2024 and sell it today you would earn a total of 280.00 from holding HannStar Board Corp or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HannStar Board Corp vs. Lien Chang Electronic
Performance |
| Timeline |
| HannStar Board Corp |
| Lien Chang Electronic |
HannStar Board and Lien Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HannStar Board and Lien Chang
The main advantage of trading using opposite HannStar Board and Lien Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HannStar Board position performs unexpectedly, Lien Chang 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 Lien Chang will offset losses from the drop in Lien Chang's long position.| HannStar Board vs. Tripod Technology Corp | HannStar Board vs. Hannstar Display Corp | HannStar Board vs. Compeq Manufacturing Co | HannStar Board vs. Unimicron Technology Corp |
| Lien Chang vs. Hitron Technologies | Lien Chang vs. Universal Microelectronics Co | Lien Chang vs. Pan International Industrial Corp | Lien Chang vs. Sunonwealth Electric Machine |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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