Correlation Between Hana Microelectronics and Diamond Building
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Diamond Building 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 Hana Microelectronics and Diamond Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Microelectronics Public and Diamond Building Products, you can compare the effects of market volatilities on Hana Microelectronics and Diamond Building 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 Hana Microelectronics with a short position of Diamond Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Diamond Building.
Diversification Opportunities for Hana Microelectronics and Diamond Building
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hana and Diamond is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Diamond Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Building Products and Hana Microelectronics 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 Hana Microelectronics Public are associated (or correlated) with Diamond Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Building Products has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Diamond Building go up and down completely randomly.
Pair Corralation between Hana Microelectronics and Diamond Building
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the Diamond Building. In addition to that, Hana Microelectronics is 5.42 times more volatile than Diamond Building Products. It trades about -0.32 of its total potential returns per unit of risk. Diamond Building Products is currently generating about -0.17 per unit of volatility. If you would invest 790.00 in Diamond Building Products on August 29, 2024 and sell it today you would lose (20.00) from holding Diamond Building Products or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hana Microelectronics Public vs. Diamond Building Products
Performance |
| Timeline |
| Hana Microelectronics |
| Diamond Building Products |
Hana Microelectronics and Diamond Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and Diamond Building
The main advantage of trading using opposite Hana Microelectronics and Diamond Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Diamond Building 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 Diamond Building will offset losses from the drop in Diamond Building's long position.| Hana Microelectronics vs. AP Public | Hana Microelectronics vs. Jasmine International Public | Hana Microelectronics vs. Asia Plus Group | Hana Microelectronics vs. Bangchak Public |
| Diamond Building vs. 2S Metal Public | Diamond Building vs. AAPICO Hitech Public | Diamond Building vs. Bangsaphan Barmill Public | Diamond Building vs. AJ Plast 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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