Correlation Between Auction Technology and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Auction Technology and Hon Hai 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 Auction Technology and Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Hon Hai Precision, you can compare the effects of market volatilities on Auction Technology and Hon Hai 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 Auction Technology with a short position of Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Hon Hai.
Diversification Opportunities for Auction Technology and Hon Hai
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auction and Hon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision and Auction Technology 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 Auction Technology Group are associated (or correlated) with Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of Auction Technology i.e., Auction Technology and Hon Hai go up and down completely randomly.
Pair Corralation between Auction Technology and Hon Hai
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 1.15 times more return on investment than Hon Hai. However, Auction Technology is 1.15 times more volatile than Hon Hai Precision. It trades about 0.02 of its potential returns per unit of risk. Hon Hai Precision is currently generating about 0.01 per unit of risk. If you would invest 56,600 in Auction Technology Group on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Auction Technology Group or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. Hon Hai Precision
Performance |
| Timeline |
| Auction Technology |
| Hon Hai Precision |
Auction Technology and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Hon Hai
The main advantage of trading using opposite Auction Technology and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| Auction Technology vs. Home Depot | Auction Technology vs. Chrysalis Investments | Auction Technology vs. Neometals | Auction Technology vs. Coor Service Management |
| Hon Hai vs. LPKF Laser Electronics | Hon Hai vs. Symphony Environmental Technologies | Hon Hai vs. Dentsply Sirona | Hon Hai vs. Foresight Environmental Infrastructure |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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