Correlation Between Farglory FTZ and Hannstar Display
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ 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 Farglory FTZ and Hannstar Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory FTZ Investment and Hannstar Display Corp, you can compare the effects of market volatilities on Farglory FTZ 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 Farglory FTZ with a short position of Hannstar Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Hannstar Display.
Diversification Opportunities for Farglory FTZ and Hannstar Display
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Farglory and Hannstar is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment 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 Farglory FTZ 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 Farglory FTZ Investment 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 Farglory FTZ i.e., Farglory FTZ and Hannstar Display go up and down completely randomly.
Pair Corralation between Farglory FTZ and Hannstar Display
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the Hannstar Display. In addition to that, Farglory FTZ is 1.12 times more volatile than Hannstar Display Corp. It trades about -0.08 of its total potential returns per unit of risk. Hannstar Display Corp is currently generating about -0.06 per unit of volatility. If you would invest 1,015 in Hannstar Display Corp on August 29, 2024 and sell it today you would lose (131.00) from holding Hannstar Display Corp or give up 12.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Hannstar Display Corp
Performance |
| Timeline |
| Farglory FTZ Investment |
| Hannstar Display Corp |
Farglory FTZ and Hannstar Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Hannstar Display
The main advantage of trading using opposite Farglory FTZ and Hannstar Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ 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.| Farglory FTZ vs. Yulon Motor Co | Farglory FTZ vs. Far Eastern Department | Farglory FTZ vs. China Steel Corp | Farglory FTZ vs. Chang Hwa Commercial |
| Hannstar Display vs. Sitronix Technology Corp | Hannstar Display vs. Elan Microelectronics Corp | Hannstar Display vs. Global Unichip Corp | Hannstar Display vs. Holtek 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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