Correlation Between Forth Public and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both Forth Public and Hana Microelectronics 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 Forth Public and Hana Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forth Public and Hana Microelectronics Public, you can compare the effects of market volatilities on Forth Public and Hana Microelectronics 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 Forth Public with a short position of Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Public and Hana Microelectronics.
Diversification Opportunities for Forth Public and Hana Microelectronics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forth and Hana is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Forth Public and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics and Forth Public 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 Forth Public are associated (or correlated) with Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of Forth Public i.e., Forth Public and Hana Microelectronics go up and down completely randomly.
Pair Corralation between Forth Public and Hana Microelectronics
Assuming the 90 days trading horizon Forth Public is expected to generate 1.5 times more return on investment than Hana Microelectronics. However, Forth Public is 1.5 times more volatile than Hana Microelectronics Public. It trades about -0.04 of its potential returns per unit of risk. Hana Microelectronics Public is currently generating about -0.09 per unit of risk. If you would invest 1,569 in Forth Public on September 1, 2024 and sell it today you would lose (439.00) from holding Forth Public or give up 27.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forth Public vs. Hana Microelectronics Public
Performance |
| Timeline |
| Forth Public |
| Hana Microelectronics |
Forth Public and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forth Public and Hana Microelectronics
The main advantage of trading using opposite Forth Public and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forth Public position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' long position.| Forth Public vs. AP Public | Forth Public vs. Jasmine International Public | Forth Public vs. Asia Plus Group | Forth Public vs. Bangchak Public |
| Hana Microelectronics vs. AP Public | Hana Microelectronics vs. Jasmine International Public | Hana Microelectronics vs. Asia Plus Group | Hana Microelectronics vs. Bangchak Public |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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