Correlation Between HannStar Board and Global Brands
Can any of the company-specific risk be diversified away by investing in both HannStar Board and Global Brands 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 Global Brands 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 Global Brands Manufacture, you can compare the effects of market volatilities on HannStar Board and Global Brands 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 Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of HannStar Board and Global Brands.
Diversification Opportunities for HannStar Board and Global Brands
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HannStar and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and Global Brands Manufacture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Brands Manufacture 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 Global Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Brands Manufacture has no effect on the direction of HannStar Board i.e., HannStar Board and Global Brands go up and down completely randomly.
Pair Corralation between HannStar Board and Global Brands
Assuming the 90 days trading horizon HannStar Board is expected to generate 1.86 times less return on investment than Global Brands. But when comparing it to its historical volatility, HannStar Board Corp is 1.17 times less risky than Global Brands. It trades about 0.05 of its potential returns per unit of risk. Global Brands Manufacture is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,375 in Global Brands Manufacture on November 28, 2024 and sell it today you would earn a total of 4,135 from holding Global Brands Manufacture or generate 122.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HannStar Board Corp vs. Global Brands Manufacture
Performance |
| Timeline |
| HannStar Board Corp |
| Global Brands Manufacture |
HannStar Board and Global Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HannStar Board and Global Brands
The main advantage of trading using opposite HannStar Board and Global Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HannStar Board position performs unexpectedly, Global Brands 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 Global Brands will offset losses from the drop in Global Brands' 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 |
| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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