Correlation Between Hannstar Display and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and Sunmax Biotechnology 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 Sunmax Biotechnology 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 Sunmax Biotechnology Co, you can compare the effects of market volatilities on Hannstar Display and Sunmax Biotechnology 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 Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and Sunmax Biotechnology.
Diversification Opportunities for Hannstar Display and Sunmax Biotechnology
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hannstar and Sunmax is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology 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 Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Hannstar Display i.e., Hannstar Display and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between Hannstar Display and Sunmax Biotechnology
Assuming the 90 days trading horizon Hannstar Display Corp is expected to under-perform the Sunmax Biotechnology. In addition to that, Hannstar Display is 1.19 times more volatile than Sunmax Biotechnology Co. It trades about -0.08 of its total potential returns per unit of risk. Sunmax Biotechnology Co is currently generating about 0.0 per unit of volatility. If you would invest 27,600 in Sunmax Biotechnology Co on September 13, 2024 and sell it today you would lose (50.00) from holding Sunmax Biotechnology Co or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. Sunmax Biotechnology Co
Performance |
| Timeline |
| Hannstar Display Corp |
| Sunmax Biotechnology |
Hannstar Display and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and Sunmax Biotechnology
The main advantage of trading using opposite Hannstar Display and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, Sunmax Biotechnology 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology's long position.| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Ruentex Development Co | Hannstar Display vs. WiseChip Semiconductor |
| Sunmax Biotechnology vs. Ruentex Development Co | Sunmax Biotechnology vs. Symtek Automation Asia | Sunmax Biotechnology vs. WiseChip Semiconductor | Sunmax Biotechnology vs. Novatek Microelectronics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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