Correlation Between General Plastic and Hota Industrial
Can any of the company-specific risk be diversified away by investing in both General Plastic and Hota Industrial 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 General Plastic and Hota Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Plastic Industrial and Hota Industrial Mfg, you can compare the effects of market volatilities on General Plastic and Hota Industrial 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 General Plastic with a short position of Hota Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Plastic and Hota Industrial.
Diversification Opportunities for General Plastic and Hota Industrial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Hota is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Plastic Industrial and Hota Industrial Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hota Industrial Mfg and General Plastic 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 General Plastic Industrial are associated (or correlated) with Hota Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hota Industrial Mfg has no effect on the direction of General Plastic i.e., General Plastic and Hota Industrial go up and down completely randomly.
Pair Corralation between General Plastic and Hota Industrial
Assuming the 90 days trading horizon General Plastic Industrial is expected to generate 0.17 times more return on investment than Hota Industrial. However, General Plastic Industrial is 5.88 times less risky than Hota Industrial. It trades about 0.02 of its potential returns per unit of risk. Hota Industrial Mfg is currently generating about -0.11 per unit of risk. If you would invest 3,415 in General Plastic Industrial on October 25, 2024 and sell it today you would earn a total of 5.00 from holding General Plastic Industrial or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Plastic Industrial vs. Hota Industrial Mfg
Performance |
| Timeline |
| General Plastic Indu |
| Hota Industrial Mfg |
General Plastic and Hota Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Plastic and Hota Industrial
The main advantage of trading using opposite General Plastic and Hota Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Plastic position performs unexpectedly, Hota Industrial 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 Hota Industrial will offset losses from the drop in Hota Industrial's long position.| General Plastic vs. I Sheng Electric Wire | General Plastic vs. LK Engineering Co | General Plastic vs. Aten International Co | General Plastic vs. Flytech Technology Co |
| Hota Industrial vs. BizLink Holding | Hota Industrial vs. Delta Electronics | Hota Industrial vs. Eclat Textile Co | Hota Industrial vs. Chroma ATE |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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