Correlation Between Hannstar Display and Transcend Information
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and Transcend Information 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 Display and Transcend Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannstar Display Corp and Transcend Information, you can compare the effects of market volatilities on Hannstar Display and Transcend Information 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 Display with a short position of Transcend Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and Transcend Information.
Diversification Opportunities for Hannstar Display and Transcend Information
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hannstar and Transcend is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Transcend Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcend Information and Hannstar Display 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 Display Corp are associated (or correlated) with Transcend Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcend Information has no effect on the direction of Hannstar Display i.e., Hannstar Display and Transcend Information go up and down completely randomly.
Pair Corralation between Hannstar Display and Transcend Information
Assuming the 90 days trading horizon Hannstar Display Corp is expected to under-perform the Transcend Information. In addition to that, Hannstar Display is 1.24 times more volatile than Transcend Information. It trades about -0.08 of its total potential returns per unit of risk. Transcend Information is currently generating about 0.05 per unit of volatility. If you would invest 9,330 in Transcend Information on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Transcend Information or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. Transcend Information
Performance |
| Timeline |
| Hannstar Display Corp |
| Transcend Information |
Hannstar Display and Transcend Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and Transcend Information
The main advantage of trading using opposite Hannstar Display and Transcend Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, Transcend Information 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 Transcend Information will offset losses from the drop in Transcend Information's long position.| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Ruentex Development Co | Hannstar Display vs. WiseChip Semiconductor |
| Transcend Information vs. AU Optronics | Transcend Information vs. Innolux Corp | Transcend Information vs. Ruentex Development Co | Transcend Information vs. WiseChip 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 Stocks Directory module to find actively traded stocks across global markets.
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