Correlation Between Hannstar Display and HannsTouch Solution
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and HannsTouch Solution 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 HannsTouch Solution 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 HannsTouch Solution, you can compare the effects of market volatilities on Hannstar Display and HannsTouch Solution 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 HannsTouch Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and HannsTouch Solution.
Diversification Opportunities for Hannstar Display and HannsTouch Solution
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannstar and HannsTouch is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and HannsTouch Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HannsTouch Solution 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 HannsTouch Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HannsTouch Solution has no effect on the direction of Hannstar Display i.e., Hannstar Display and HannsTouch Solution go up and down completely randomly.
Pair Corralation between Hannstar Display and HannsTouch Solution
Assuming the 90 days trading horizon Hannstar Display Corp is expected to generate 0.47 times more return on investment than HannsTouch Solution. However, Hannstar Display Corp is 2.14 times less risky than HannsTouch Solution. It trades about -0.09 of its potential returns per unit of risk. HannsTouch Solution is currently generating about -0.07 per unit of risk. If you would invest 910.00 in Hannstar Display Corp on August 30, 2024 and sell it today you would lose (26.00) from holding Hannstar Display Corp or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. HannsTouch Solution
Performance |
| Timeline |
| Hannstar Display Corp |
| HannsTouch Solution |
Hannstar Display and HannsTouch Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and HannsTouch Solution
The main advantage of trading using opposite Hannstar Display and HannsTouch Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, HannsTouch Solution 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 HannsTouch Solution will offset losses from the drop in HannsTouch Solution's long position.| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Winbond Electronics Corp | Hannstar Display vs. Qisda Corp |
| HannsTouch Solution vs. Hannstar Display Corp | HannsTouch Solution vs. Amtran Technology Co | HannsTouch Solution vs. AU Optronics | HannsTouch Solution vs. Optimax Technology Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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