Correlation Between Hannstar Display and Amazing Microelectronic
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and Amazing Microelectronic 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 Amazing Microelectronic 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 Amazing Microelectronic, you can compare the effects of market volatilities on Hannstar Display and Amazing Microelectronic 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 Amazing Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and Amazing Microelectronic.
Diversification Opportunities for Hannstar Display and Amazing Microelectronic
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannstar and Amazing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Amazing Microelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazing Microelectronic 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 Amazing Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazing Microelectronic has no effect on the direction of Hannstar Display i.e., Hannstar Display and Amazing Microelectronic go up and down completely randomly.
Pair Corralation between Hannstar Display and Amazing Microelectronic
Assuming the 90 days trading horizon Hannstar Display Corp is expected to generate 0.72 times more return on investment than Amazing Microelectronic. However, Hannstar Display Corp is 1.4 times less risky than Amazing Microelectronic. It trades about -0.1 of its potential returns per unit of risk. Amazing Microelectronic is currently generating about -0.09 per unit of risk. If you would invest 928.00 in Hannstar Display Corp on September 13, 2024 and sell it today you would lose (50.00) from holding Hannstar Display Corp or give up 5.39% 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. Amazing Microelectronic
Performance |
| Timeline |
| Hannstar Display Corp |
| Amazing Microelectronic |
Hannstar Display and Amazing Microelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and Amazing Microelectronic
The main advantage of trading using opposite Hannstar Display and Amazing Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, Amazing Microelectronic 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 Amazing Microelectronic will offset losses from the drop in Amazing Microelectronic's long position.| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Ruentex Development Co | Hannstar Display vs. WiseChip Semiconductor |
| Amazing Microelectronic vs. Chernan Metal Industrial | Amazing Microelectronic vs. Hannstar Display Corp | Amazing Microelectronic vs. Min Aik Technology | Amazing Microelectronic vs. STL Technology Co |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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