Correlation Between New Palace and Hi Lai
Can any of the company-specific risk be diversified away by investing in both New Palace and Hi Lai 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 New Palace and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Palace International and Hi Lai Foods Co, you can compare the effects of market volatilities on New Palace and Hi Lai 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 New Palace with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Palace and Hi Lai.
Diversification Opportunities for New Palace and Hi Lai
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and 1268 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding New Palace International and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and New Palace 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 New Palace International are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of New Palace i.e., New Palace and Hi Lai go up and down completely randomly.
Pair Corralation between New Palace and Hi Lai
Assuming the 90 days trading horizon New Palace International is expected to under-perform the Hi Lai. In addition to that, New Palace is 2.56 times more volatile than Hi Lai Foods Co. It trades about -0.27 of its total potential returns per unit of risk. Hi Lai Foods Co is currently generating about -0.29 per unit of volatility. If you would invest 15,500 in Hi Lai Foods Co on August 24, 2024 and sell it today you would lose (450.00) from holding Hi Lai Foods Co or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
New Palace International vs. Hi Lai Foods Co
Performance |
| Timeline |
| New Palace International |
| Hi Lai Foods |
New Palace and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Palace and Hi Lai
The main advantage of trading using opposite New Palace and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Palace position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| New Palace vs. Taiwan Semiconductor Manufacturing | New Palace vs. Hon Hai Precision | New Palace vs. MediaTek | New Palace vs. Chunghwa Telecom Co |
| Hi Lai vs. Gourmet Master Co | Hi Lai vs. Wowprime Corp | Hi Lai vs. Louisa Professional Coffee | Hi Lai vs. An Shin Food Services |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |