Correlation Between Deswell Industries and MicroCloud Hologram
Can any of the company-specific risk be diversified away by investing in both Deswell Industries and MicroCloud Hologram 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 Deswell Industries and MicroCloud Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deswell Industries and MicroCloud Hologram, you can compare the effects of market volatilities on Deswell Industries and MicroCloud Hologram 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 Deswell Industries with a short position of MicroCloud Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deswell Industries and MicroCloud Hologram.
Diversification Opportunities for Deswell Industries and MicroCloud Hologram
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Deswell and MicroCloud is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Deswell Industries and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram and Deswell Industries 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 Deswell Industries are associated (or correlated) with MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of Deswell Industries i.e., Deswell Industries and MicroCloud Hologram go up and down completely randomly.
Pair Corralation between Deswell Industries and MicroCloud Hologram
Given the investment horizon of 90 days Deswell Industries is expected to generate 0.1 times more return on investment than MicroCloud Hologram. However, Deswell Industries is 9.65 times less risky than MicroCloud Hologram. It trades about -0.01 of its potential returns per unit of risk. MicroCloud Hologram is currently generating about -0.53 per unit of risk. If you would invest 239.00 in Deswell Industries on November 3, 2024 and sell it today you would lose (1.00) from holding Deswell Industries or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deswell Industries vs. MicroCloud Hologram
Performance |
| Timeline |
| Deswell Industries |
| MicroCloud Hologram |
Deswell Industries and MicroCloud Hologram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deswell Industries and MicroCloud Hologram
The main advantage of trading using opposite Deswell Industries and MicroCloud Hologram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deswell Industries position performs unexpectedly, MicroCloud Hologram 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 MicroCloud Hologram will offset losses from the drop in MicroCloud Hologram's long position.| Deswell Industries vs. Ieh Corp | Deswell Industries vs. LGL Group | Deswell Industries vs. SigmaTron International | Deswell Industries vs. Daktronics |
| MicroCloud Hologram vs. Plexus Corp | MicroCloud Hologram vs. OSI Systems | MicroCloud Hologram vs. CTS Corporation | MicroCloud Hologram vs. Benchmark Electronics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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