Correlation Between HIM International and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both HIM International and Yageo Corp 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 HIM International and Yageo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIM International Music and Yageo Corp, you can compare the effects of market volatilities on HIM International and Yageo Corp 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 HIM International with a short position of Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and Yageo Corp.
Diversification Opportunities for HIM International and Yageo Corp
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HIM and Yageo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp and HIM International 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 HIM International Music are associated (or correlated) with Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of HIM International i.e., HIM International and Yageo Corp go up and down completely randomly.
Pair Corralation between HIM International and Yageo Corp
Assuming the 90 days trading horizon HIM International Music is expected to under-perform the Yageo Corp. But the stock apears to be less risky and, when comparing its historical volatility, HIM International Music is 1.74 times less risky than Yageo Corp. The stock trades about -0.24 of its potential returns per unit of risk. The Yageo Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 52,600 in Yageo Corp on October 13, 2024 and sell it today you would earn a total of 1,000.00 from holding Yageo Corp or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HIM International Music vs. Yageo Corp
Performance |
| Timeline |
| HIM International Music |
| Yageo Corp |
HIM International and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and Yageo Corp
The main advantage of trading using opposite HIM International and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| HIM International vs. Hsinli Chemical Industrial | HIM International vs. Simple Mart Retail | HIM International vs. International Games System | HIM International vs. Est Global Apparel |
| Yageo Corp vs. TWOWAY Communications | Yageo Corp vs. HIM International Music | Yageo Corp vs. Ma Kuang Healthcare | Yageo Corp vs. Syscom Computer Engineering |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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