Correlation Between Hana Microelectronics and GFPT Public
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and GFPT Public 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 GFPT Public 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 GFPT Public, you can compare the effects of market volatilities on Hana Microelectronics and GFPT Public 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 GFPT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and GFPT Public.
Diversification Opportunities for Hana Microelectronics and GFPT Public
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and GFPT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and GFPT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFPT Public 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 GFPT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFPT Public has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and GFPT Public go up and down completely randomly.
Pair Corralation between Hana Microelectronics and GFPT Public
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the GFPT Public. In addition to that, Hana Microelectronics is 1.48 times more volatile than GFPT Public. It trades about -0.05 of its total potential returns per unit of risk. GFPT Public is currently generating about -0.02 per unit of volatility. If you would invest 1,185 in GFPT Public on November 27, 2024 and sell it today you would lose (305.00) from holding GFPT Public or give up 25.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hana Microelectronics Public vs. GFPT Public
Performance |
| Timeline |
| Hana Microelectronics |
| GFPT Public |
Hana Microelectronics and GFPT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and GFPT Public
The main advantage of trading using opposite Hana Microelectronics and GFPT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, GFPT Public 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 GFPT Public will offset losses from the drop in GFPT Public's long position.| Hana Microelectronics vs. KCE Electronics Public | Hana Microelectronics vs. Land and Houses | Hana Microelectronics vs. Delta Electronics Public | Hana Microelectronics vs. The Siam Cement |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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