Correlation Between Century Iron and Hannstar Display
Can any of the company-specific risk be diversified away by investing in both Century Iron and Hannstar Display 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 Century Iron and Hannstar Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Hannstar Display Corp, you can compare the effects of market volatilities on Century Iron and Hannstar Display 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 Century Iron with a short position of Hannstar Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Hannstar Display.
Diversification Opportunities for Century Iron and Hannstar Display
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Hannstar is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And and Hannstar Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannstar Display Corp and Century Iron 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 Century Iron And are associated (or correlated) with Hannstar Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannstar Display Corp has no effect on the direction of Century Iron i.e., Century Iron and Hannstar Display go up and down completely randomly.
Pair Corralation between Century Iron and Hannstar Display
Assuming the 90 days trading horizon Century Iron And is expected to generate 1.34 times more return on investment than Hannstar Display. However, Century Iron is 1.34 times more volatile than Hannstar Display Corp. It trades about -0.06 of its potential returns per unit of risk. Hannstar Display Corp is currently generating about -0.17 per unit of risk. If you would invest 18,350 in Century Iron And on January 22, 2025 and sell it today you would lose (2,150) from holding Century Iron And or give up 11.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Iron And vs. Hannstar Display Corp
Performance |
| Timeline |
| Century Iron And |
| Hannstar Display Corp |
Century Iron and Hannstar Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Iron and Hannstar Display
The main advantage of trading using opposite Century Iron and Hannstar Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron position performs unexpectedly, Hannstar Display 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 Hannstar Display will offset losses from the drop in Hannstar Display's long position.| Century Iron vs. Swancor Holding Co | Century Iron vs. Hsin Kuang Steel | Century Iron vs. Ta Chen Stainless | Century Iron vs. Chung Hung Steel |
| Hannstar Display vs. AU Optronics | Hannstar Display vs. Innolux Corp | Hannstar Display vs. Winbond Electronics Corp | Hannstar Display vs. Qisda Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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