Correlation Between Hon Hai and Strix Group
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Strix Group 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 Strix Group 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 Strix Group Plc, you can compare the effects of market volatilities on Hon Hai and Strix Group 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Strix Group.
Diversification Opportunities for Hon Hai and Strix Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hon and Strix is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Hon Hai i.e., Hon Hai and Strix Group go up and down completely randomly.
Pair Corralation between Hon Hai and Strix Group
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 1.43 times more return on investment than Strix Group. However, Hon Hai is 1.43 times more volatile than Strix Group Plc. It trades about 0.08 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.03 per unit of risk. If you would invest 540.00 in Hon Hai Precision on November 9, 2024 and sell it today you would earn a total of 440.00 from holding Hon Hai Precision or generate 81.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Strix Group Plc
Performance |
| Timeline |
| Hon Hai Precision |
| Strix Group Plc |
Hon Hai and Strix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Strix Group
The main advantage of trading using opposite Hon Hai and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Strix Group 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 Strix Group will offset losses from the drop in Strix Group's long position.| Hon Hai vs. ALBIS LEASING AG | Hon Hai vs. Universal Display | Hon Hai vs. PLAYTIKA HOLDING DL 01 | Hon Hai vs. Lendlease Group |
| Strix Group vs. Cognizant Technology Solutions | Strix Group vs. Emperor Entertainment Hotel | Strix Group vs. Take Two Interactive Software | Strix Group vs. SMA Solar Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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