Correlation Between Hannstar Display and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and Asia Electronic 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 Asia Electronic 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 Asia Electronic Material, you can compare the effects of market volatilities on Hannstar Display and Asia Electronic 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 Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and Asia Electronic.
Diversification Opportunities for Hannstar Display and Asia Electronic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannstar and Asia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material 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 Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Hannstar Display i.e., Hannstar Display and Asia Electronic go up and down completely randomly.
Pair Corralation between Hannstar Display and Asia Electronic
Assuming the 90 days trading horizon Hannstar Display Corp is expected to under-perform the Asia Electronic. In addition to that, Hannstar Display is 1.29 times more volatile than Asia Electronic Material. It trades about -0.1 of its total potential returns per unit of risk. Asia Electronic Material is currently generating about 0.04 per unit of volatility. If you would invest 2,075 in Asia Electronic Material on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Asia Electronic Material or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. Asia Electronic Material
Performance |
| Timeline |
| Hannstar Display Corp |
| Asia Electronic Material |
Hannstar Display and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and Asia Electronic
The main advantage of trading using opposite Hannstar Display and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| Hannstar Display vs. Taiwan Semiconductor Manufacturing | Hannstar Display vs. Yang Ming Marine | Hannstar Display vs. AU Optronics | Hannstar Display vs. Nan Ya Plastics |
| Asia Electronic vs. International Games System | Asia Electronic vs. China Metal Products | Asia Electronic vs. Dynamic Medical Technologies | Asia Electronic vs. Chernan Metal Industrial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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