Correlation Between Hon Hai and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Hawesko Holding 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 Hon Hai and Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hon Hai Precision and Hawesko Holding AG, you can compare the effects of market volatilities on Hon Hai and Hawesko Holding 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 Hon Hai with a short position of Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Hawesko Holding.
Diversification Opportunities for Hon Hai and Hawesko Holding
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hon and Hawesko is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG and Hon Hai 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 Hon Hai Precision are associated (or correlated) with Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Hon Hai i.e., Hon Hai and Hawesko Holding go up and down completely randomly.
Pair Corralation between Hon Hai and Hawesko Holding
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 1.53 times more return on investment than Hawesko Holding. However, Hon Hai is 1.53 times more volatile than Hawesko Holding AG. It trades about 0.06 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.03 per unit of risk. If you would invest 562.00 in Hon Hai Precision on August 29, 2024 and sell it today you would earn a total of 608.00 from holding Hon Hai Precision or generate 108.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Hon Hai Precision vs. Hawesko Holding AG
Performance |
| Timeline |
| Hon Hai Precision |
| Hawesko Holding AG |
Hon Hai and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Hawesko Holding
The main advantage of trading using opposite Hon Hai and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| Hon Hai vs. Lion One Metals | Hon Hai vs. WisdomTree Investments | Hon Hai vs. Jacquet Metal Service | Hon Hai vs. REGAL ASIAN INVESTMENTS |
| Hawesko Holding vs. FAST RETAIL ADR | Hawesko Holding vs. Daido Steel Co | Hawesko Holding vs. SPARTAN STORES | Hawesko Holding vs. BJs Wholesale Club |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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