Correlation Between First Hawaiian and China Minsh
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and China Minsh 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 First Hawaiian and China Minsh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and China Minsh, you can compare the effects of market volatilities on First Hawaiian and China Minsh 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 First Hawaiian with a short position of China Minsh. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and China Minsh.
Diversification Opportunities for First Hawaiian and China Minsh
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and China is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh and First Hawaiian 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 First Hawaiian are associated (or correlated) with China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of First Hawaiian i.e., First Hawaiian and China Minsh go up and down completely randomly.
Pair Corralation between First Hawaiian and China Minsh
Considering the 90-day investment horizon First Hawaiian is expected to generate 1.53 times more return on investment than China Minsh. However, First Hawaiian is 1.53 times more volatile than China Minsh. It trades about 0.18 of its potential returns per unit of risk. China Minsh is currently generating about 0.14 per unit of risk. If you would invest 2,477 in First Hawaiian on August 30, 2024 and sell it today you would earn a total of 283.00 from holding First Hawaiian or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Hawaiian vs. China Minsh
Performance |
| Timeline |
| First Hawaiian |
| China Minsh |
First Hawaiian and China Minsh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and China Minsh
The main advantage of trading using opposite First Hawaiian and China Minsh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, China Minsh 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 China Minsh will offset losses from the drop in China Minsh's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| China Minsh vs. Hancock Whitney Corp | China Minsh vs. First Hawaiian | China Minsh vs. DBS Group Holdings | China Minsh vs. United Overseas Bank |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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