Correlation Between Hon Hai and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Concurrent Technologies 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 Concurrent Technologies 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 Concurrent Technologies Plc, you can compare the effects of market volatilities on Hon Hai and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Concurrent Technologies.
Diversification Opportunities for Hon Hai and Concurrent Technologies
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hon and Concurrent is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Hon Hai i.e., Hon Hai and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Hon Hai and Concurrent Technologies
Assuming the 90 days trading horizon Hon Hai is expected to generate 1.21 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Hon Hai Precision is 1.08 times less risky than Concurrent Technologies. It trades about 0.08 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,834 in Concurrent Technologies Plc on August 31, 2024 and sell it today you would earn a total of 7,566 from holding Concurrent Technologies Plc or generate 110.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Hon Hai Precision vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Hon Hai Precision |
| Concurrent Technologies |
Hon Hai and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Concurrent Technologies
The main advantage of trading using opposite Hon Hai and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| Hon Hai vs. McEwen Mining | Hon Hai vs. DFS Furniture PLC | Hon Hai vs. Beazer Homes USA | Hon Hai vs. Home Depot |
| Concurrent Technologies vs. Berkshire Hathaway | Concurrent Technologies vs. Hyundai Motor | Concurrent Technologies vs. Samsung Electronics Co | Concurrent Technologies vs. Samsung Electronics Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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