Correlation Between Corning Incorporated and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Corning Incorporated 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 Corning Incorporated and Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corning Incorporated and Hon Hai Precision, you can compare the effects of market volatilities on Corning Incorporated 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 Corning Incorporated with a short position of Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Hon Hai.
Diversification Opportunities for Corning Incorporated and Hon Hai
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Corning and Hon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated i.e., Corning Incorporated and Hon Hai go up and down completely randomly.
Pair Corralation between Corning Incorporated and Hon Hai
Assuming the 90 days horizon Corning Incorporated is expected to generate 0.27 times more return on investment than Hon Hai. However, Corning Incorporated is 3.66 times less risky than Hon Hai. It trades about 0.35 of its potential returns per unit of risk. Hon Hai Precision is currently generating about 0.08 per unit of risk. If you would invest 4,614 in Corning Incorporated on October 25, 2024 and sell it today you would earn a total of 351.00 from holding Corning Incorporated or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corning Incorporated vs. Hon Hai Precision
Performance |
| Timeline |
| Corning Incorporated |
| Hon Hai Precision |
Corning Incorporated and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corning Incorporated and Hon Hai
The main advantage of trading using opposite Corning Incorporated and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated 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.| Corning Incorporated vs. OFFICE DEPOT | Corning Incorporated vs. Infrastrutture Wireless Italiane | Corning Incorporated vs. ADDUS HOMECARE | Corning Incorporated vs. Autohome ADR |
| Hon Hai vs. Fuji Media Holdings | Hon Hai vs. ANTA SPORTS PRODUCT | Hon Hai vs. MGIC INVESTMENT | Hon Hai vs. Universal Entertainment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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