Correlation Between Hon Hai and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Elmos Semiconductor 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 Elmos Semiconductor 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 Elmos Semiconductor SE, you can compare the effects of market volatilities on Hon Hai and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Elmos Semiconductor.
Diversification Opportunities for Hon Hai and Elmos Semiconductor
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hon and Elmos is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Hon Hai i.e., Hon Hai and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Hon Hai and Elmos Semiconductor
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 1.1 times more return on investment than Elmos Semiconductor. However, Hon Hai is 1.1 times more volatile than Elmos Semiconductor SE. It trades about -0.1 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.12 per unit of risk. If you would invest 1,130 in Hon Hai Precision on November 5, 2024 and sell it today you would lose (64.00) from holding Hon Hai Precision or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Hon Hai Precision |
| Elmos Semiconductor |
Hon Hai and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Elmos Semiconductor
The main advantage of trading using opposite Hon Hai and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| Hon Hai vs. Public Storage | Hon Hai vs. Alaska Air Group | Hon Hai vs. Ryanair Holdings plc | Hon Hai vs. Teradata Corp |
| Elmos Semiconductor vs. Metals Exploration Plc | Elmos Semiconductor vs. Jacquet Metal Service | Elmos Semiconductor vs. Eastman Chemical Co | Elmos Semiconductor vs. Westlake Chemical Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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