Correlation Between Hana Microelectronics and LPN Development
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and LPN Development 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 LPN Development 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 LPN Development Public, you can compare the effects of market volatilities on Hana Microelectronics and LPN Development 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 LPN Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and LPN Development.
Diversification Opportunities for Hana Microelectronics and LPN Development
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hana and LPN is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and LPN Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPN Development 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 LPN Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPN Development Public has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and LPN Development go up and down completely randomly.
Pair Corralation between Hana Microelectronics and LPN Development
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the LPN Development. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 18.26 times less risky than LPN Development. The stock trades about -0.03 of its potential returns per unit of risk. The LPN Development Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 428.00 in LPN Development Public on September 1, 2024 and sell it today you would lose (144.00) from holding LPN Development Public or give up 33.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Microelectronics Public vs. LPN Development Public
Performance |
| Timeline |
| Hana Microelectronics |
| LPN Development Public |
Hana Microelectronics and LPN Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and LPN Development
The main advantage of trading using opposite Hana Microelectronics and LPN Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, LPN Development 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 LPN Development will offset losses from the drop in LPN Development'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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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