Correlation Between Hana Microelectronics and Muramoto Electron
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Muramoto Electron 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 Muramoto Electron 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 Muramoto Electron Public, you can compare the effects of market volatilities on Hana Microelectronics and Muramoto Electron 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 Muramoto Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Muramoto Electron.
Diversification Opportunities for Hana Microelectronics and Muramoto Electron
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hana and Muramoto is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Muramoto Electron Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muramoto Electron 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 Muramoto Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muramoto Electron Public has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Muramoto Electron go up and down completely randomly.
Pair Corralation between Hana Microelectronics and Muramoto Electron
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the Muramoto Electron. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 32.74 times less risky than Muramoto Electron. The stock trades about -0.09 of its potential returns per unit of risk. The Muramoto Electron Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 18,500 in Muramoto Electron Public on September 1, 2024 and sell it today you would lose (1,100) from holding Muramoto Electron Public or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hana Microelectronics Public vs. Muramoto Electron Public
Performance |
| Timeline |
| Hana Microelectronics |
| Muramoto Electron Public |
Hana Microelectronics and Muramoto Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and Muramoto Electron
The main advantage of trading using opposite Hana Microelectronics and Muramoto Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Muramoto Electron 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 Muramoto Electron will offset losses from the drop in Muramoto Electron'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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