Correlation Between HIM International and Launch Technologies
Can any of the company-specific risk be diversified away by investing in both HIM International and Launch Technologies 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 Launch Technologies 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 Launch Technologies Co, you can compare the effects of market volatilities on HIM International and Launch Technologies 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 Launch Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and Launch Technologies.
Diversification Opportunities for HIM International and Launch Technologies
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HIM and Launch is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and Launch Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch Technologies 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 Launch Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch Technologies has no effect on the direction of HIM International i.e., HIM International and Launch Technologies go up and down completely randomly.
Pair Corralation between HIM International and Launch Technologies
Assuming the 90 days trading horizon HIM International Music is expected to generate 0.93 times more return on investment than Launch Technologies. However, HIM International Music is 1.08 times less risky than Launch Technologies. It trades about 0.07 of its potential returns per unit of risk. Launch Technologies Co is currently generating about -0.05 per unit of risk. If you would invest 7,438 in HIM International Music on September 14, 2024 and sell it today you would earn a total of 4,812 from holding HIM International Music or generate 64.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.12% |
| Values | Daily Returns |
HIM International Music vs. Launch Technologies Co
Performance |
| Timeline |
| HIM International Music |
| Launch Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HIM International and Launch Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and Launch Technologies
The main advantage of trading using opposite HIM International and Launch Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International position performs unexpectedly, Launch Technologies 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 Launch Technologies will offset losses from the drop in Launch Technologies' long position.| HIM International vs. Elite Semiconductor Memory | HIM International vs. Vanguard International Semiconductor | HIM International vs. Simple Mart Retail | HIM International vs. Mospec Semiconductor Corp |
| Launch Technologies vs. Grand Ocean Retail | Launch Technologies vs. HIM International Music | Launch Technologies vs. Pacific Construction Co | Launch Technologies vs. New Asia Construction |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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