Correlation Between Hana Microelectronics and Italian Thai
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Italian Thai 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 Italian Thai 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 Italian Thai Development Public, you can compare the effects of market volatilities on Hana Microelectronics and Italian Thai 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 Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Italian Thai.
Diversification Opportunities for Hana Microelectronics and Italian Thai
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Italian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop 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 Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Italian Thai go up and down completely randomly.
Pair Corralation between Hana Microelectronics and Italian Thai
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to generate 0.86 times more return on investment than Italian Thai. However, Hana Microelectronics Public is 1.16 times less risky than Italian Thai. It trades about -0.2 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about -0.76 per unit of risk. If you would invest 2,360 in Hana Microelectronics Public on November 27, 2024 and sell it today you would lose (220.00) from holding Hana Microelectronics Public or give up 9.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Microelectronics Public vs. Italian Thai Development Publi
Performance |
| Timeline |
| Hana Microelectronics |
| Italian Thai Develop |
Hana Microelectronics and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and Italian Thai
The main advantage of trading using opposite Hana Microelectronics and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai'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 |
| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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