Correlation Between Hana Microelectronics and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Hwa Fong 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 Hwa Fong 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 Hwa Fong Rubber, you can compare the effects of market volatilities on Hana Microelectronics and Hwa Fong 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 Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Hwa Fong.
Diversification Opportunities for Hana Microelectronics and Hwa Fong
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and Hwa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber 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 Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Hwa Fong go up and down completely randomly.
Pair Corralation between Hana Microelectronics and Hwa Fong
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the Hwa Fong. In addition to that, Hana Microelectronics is 2.87 times more volatile than Hwa Fong Rubber. It trades about -0.38 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.2 per unit of volatility. If you would invest 450.00 in Hwa Fong Rubber on August 25, 2024 and sell it today you would lose (26.00) from holding Hwa Fong Rubber or give up 5.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hana Microelectronics Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| Hana Microelectronics |
| Hwa Fong Rubber |
Hana Microelectronics and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and Hwa Fong
The main advantage of trading using opposite Hana Microelectronics and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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