Correlation Between HannStar Board and Grand Ocean
Can any of the company-specific risk be diversified away by investing in both HannStar Board and Grand Ocean 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 Grand Ocean 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 Grand Ocean Retail, you can compare the effects of market volatilities on HannStar Board and Grand Ocean 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 Grand Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of HannStar Board and Grand Ocean.
Diversification Opportunities for HannStar Board and Grand Ocean
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HannStar and Grand is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and Grand Ocean Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Ocean Retail 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 Grand Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Ocean Retail has no effect on the direction of HannStar Board i.e., HannStar Board and Grand Ocean go up and down completely randomly.
Pair Corralation between HannStar Board and Grand Ocean
Assuming the 90 days trading horizon HannStar Board Corp is expected to under-perform the Grand Ocean. But the stock apears to be less risky and, when comparing its historical volatility, HannStar Board Corp is 3.18 times less risky than Grand Ocean. The stock trades about -0.32 of its potential returns per unit of risk. The Grand Ocean Retail is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Grand Ocean Retail on August 28, 2024 and sell it today you would lose (80.00) from holding Grand Ocean Retail or give up 6.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HannStar Board Corp vs. Grand Ocean Retail
Performance |
| Timeline |
| HannStar Board Corp |
| Grand Ocean Retail |
HannStar Board and Grand Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HannStar Board and Grand Ocean
The main advantage of trading using opposite HannStar Board and Grand Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HannStar Board position performs unexpectedly, Grand Ocean 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 Grand Ocean will offset losses from the drop in Grand Ocean's long position.The idea behind HannStar Board Corp and Grand Ocean Retail pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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