Correlation Between Hana Microelectronics and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and MFEC PCL 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 MFEC PCL 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 MFEC PCL, you can compare the effects of market volatilities on Hana Microelectronics and MFEC PCL 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 MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and MFEC PCL.
Diversification Opportunities for Hana Microelectronics and MFEC PCL
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hana and MFEC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL 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 MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and MFEC PCL go up and down completely randomly.
Pair Corralation between Hana Microelectronics and MFEC PCL
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the MFEC PCL. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 17.97 times less risky than MFEC PCL. The stock trades about -0.04 of its potential returns per unit of risk. The MFEC PCL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 711.00 in MFEC PCL on October 24, 2024 and sell it today you would lose (136.00) from holding MFEC PCL or give up 19.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Microelectronics Public vs. MFEC PCL
Performance |
| Timeline |
| Hana Microelectronics |
| MFEC PCL |
Hana Microelectronics and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Microelectronics and MFEC PCL
The main advantage of trading using opposite Hana Microelectronics and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, MFEC PCL 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 MFEC PCL will offset losses from the drop in MFEC PCL'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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