Correlation Between HIM International and Galaxy Software
Can any of the company-specific risk be diversified away by investing in both HIM International and Galaxy Software 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 Galaxy Software 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 Galaxy Software Services, you can compare the effects of market volatilities on HIM International and Galaxy Software 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 Galaxy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and Galaxy Software.
Diversification Opportunities for HIM International and Galaxy Software
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HIM and Galaxy is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and Galaxy Software Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Software Services 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 Galaxy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Software Services has no effect on the direction of HIM International i.e., HIM International and Galaxy Software go up and down completely randomly.
Pair Corralation between HIM International and Galaxy Software
Assuming the 90 days trading horizon HIM International Music is expected to under-perform the Galaxy Software. But the stock apears to be less risky and, when comparing its historical volatility, HIM International Music is 29.84 times less risky than Galaxy Software. The stock trades about 0.0 of its potential returns per unit of risk. The Galaxy Software Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,640 in Galaxy Software Services on September 2, 2024 and sell it today you would lose (690.00) from holding Galaxy Software Services or give up 5.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HIM International Music vs. Galaxy Software Services
Performance |
| Timeline |
| HIM International Music |
| Galaxy Software Services |
HIM International and Galaxy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and Galaxy Software
The main advantage of trading using opposite HIM International and Galaxy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International position performs unexpectedly, Galaxy Software 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 Galaxy Software will offset losses from the drop in Galaxy Software's long position.| HIM International vs. Cameo Communications | HIM International vs. Nova Technology | HIM International vs. TWOWAY Communications | HIM International vs. Asmedia Technology |
| Galaxy Software vs. Foxconn Technology Co | Galaxy Software vs. FocalTech Systems Co | Galaxy Software vs. Sesoda Corp | Galaxy Software vs. Wah Hong 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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