Correlation Between Shanghai Commercial and Hannstar Display
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial 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 Shanghai Commercial and Hannstar Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Commercial Savings and Hannstar Display Corp, you can compare the effects of market volatilities on Shanghai Commercial 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 Shanghai Commercial with a short position of Hannstar Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Hannstar Display.
Diversification Opportunities for Shanghai Commercial and Hannstar Display
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and Hannstar is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings 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 Shanghai Commercial 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 Shanghai Commercial Savings 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 Shanghai Commercial i.e., Shanghai Commercial and Hannstar Display go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Hannstar Display
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to generate 0.66 times more return on investment than Hannstar Display. However, Shanghai Commercial Savings is 1.52 times less risky than Hannstar Display. It trades about -0.03 of its potential returns per unit of risk. Hannstar Display Corp is currently generating about -0.02 per unit of risk. If you would invest 4,705 in Shanghai Commercial Savings on August 26, 2024 and sell it today you would lose (920.00) from holding Shanghai Commercial Savings or give up 19.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Hannstar Display Corp
Performance |
| Timeline |
| Shanghai Commercial |
| Hannstar Display Corp |
Shanghai Commercial and Hannstar Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Hannstar Display
The main advantage of trading using opposite Shanghai Commercial and Hannstar Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial 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.| Shanghai Commercial vs. Mega Financial Holding | Shanghai Commercial vs. Yuanta Financial Holdings | Shanghai Commercial vs. ESUN Financial Holding | Shanghai Commercial vs. Taiwan Cooperative Financial |
| Hannstar Display vs. Novatek Microelectronics Corp | Hannstar Display vs. Quanta Computer | Hannstar Display vs. United Microelectronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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