Correlation Between Hannstar Display and I Sheng
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and I Sheng 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 I Sheng 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 I Sheng Electric Wire, you can compare the effects of market volatilities on Hannstar Display and I Sheng 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 I Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and I Sheng.
Diversification Opportunities for Hannstar Display and I Sheng
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hannstar and 6115 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and I Sheng Electric Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Sheng Electric 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 I Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Sheng Electric has no effect on the direction of Hannstar Display i.e., Hannstar Display and I Sheng go up and down completely randomly.
Pair Corralation between Hannstar Display and I Sheng
Assuming the 90 days trading horizon Hannstar Display Corp is expected to under-perform the I Sheng. In addition to that, Hannstar Display is 2.12 times more volatile than I Sheng Electric Wire. It trades about -0.19 of its total potential returns per unit of risk. I Sheng Electric Wire is currently generating about -0.05 per unit of volatility. If you would invest 5,250 in I Sheng Electric Wire on September 4, 2024 and sell it today you would lose (40.00) from holding I Sheng Electric Wire or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. I Sheng Electric Wire
Performance |
| Timeline |
| Hannstar Display Corp |
| I Sheng Electric |
Hannstar Display and I Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and I Sheng
The main advantage of trading using opposite Hannstar Display and I Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, I Sheng 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 I Sheng will offset losses from the drop in I Sheng's long position.| Hannstar Display vs. Taiwan Semiconductor Manufacturing | Hannstar Display vs. Yang Ming Marine | Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp |
| I Sheng vs. Pacific Construction Co | I Sheng vs. Kindom Construction Corp | I Sheng vs. Dawushan Farm Tech | I Sheng vs. Grand Ocean Retail |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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