Correlation Between Hon Hai and AIM ImmunoTech
Can any of the company-specific risk be diversified away by investing in both Hon Hai and AIM ImmunoTech 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 AIM ImmunoTech 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 AIM ImmunoTech, you can compare the effects of market volatilities on Hon Hai and AIM ImmunoTech 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 AIM ImmunoTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and AIM ImmunoTech.
Diversification Opportunities for Hon Hai and AIM ImmunoTech
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hon and AIM is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech 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 AIM ImmunoTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ImmunoTech has no effect on the direction of Hon Hai i.e., Hon Hai and AIM ImmunoTech go up and down completely randomly.
Pair Corralation between Hon Hai and AIM ImmunoTech
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 0.44 times more return on investment than AIM ImmunoTech. However, Hon Hai Precision is 2.29 times less risky than AIM ImmunoTech. It trades about 0.07 of its potential returns per unit of risk. AIM ImmunoTech is currently generating about -0.02 per unit of risk. If you would invest 626.00 in Hon Hai Precision on November 27, 2024 and sell it today you would earn a total of 482.00 from holding Hon Hai Precision or generate 77.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. AIM ImmunoTech
Performance |
| Timeline |
| Hon Hai Precision |
| AIM ImmunoTech |
Hon Hai and AIM ImmunoTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and AIM ImmunoTech
The main advantage of trading using opposite Hon Hai and AIM ImmunoTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, AIM ImmunoTech 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 AIM ImmunoTech will offset losses from the drop in AIM ImmunoTech's long position.| Hon Hai vs. Aeorema Communications Plc | Hon Hai vs. Concurrent Technologies Plc | Hon Hai vs. Take Two Interactive Software | Hon Hai vs. Learning Technologies Group |
| AIM ImmunoTech vs. Eastinco Mining Exploration | AIM ImmunoTech vs. Atalaya Mining | AIM ImmunoTech vs. AMG Advanced Metallurgical | AIM ImmunoTech vs. AfriTin Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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