Correlation Between Hon Hai and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Haleon PLC 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 Haleon PLC 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 Haleon PLC, you can compare the effects of market volatilities on Hon Hai and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Haleon PLC.
Diversification Opportunities for Hon Hai and Haleon PLC
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hon and Haleon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of Hon Hai i.e., Hon Hai and Haleon PLC go up and down completely randomly.
Pair Corralation between Hon Hai and Haleon PLC
Assuming the 90 days trading horizon Hon Hai is expected to generate 2.04 times less return on investment than Haleon PLC. In addition to that, Hon Hai is 2.62 times more volatile than Haleon PLC. It trades about 0.02 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.11 per unit of volatility. If you would invest 32,465 in Haleon PLC on November 28, 2024 and sell it today you would earn a total of 7,085 from holding Haleon PLC or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Hon Hai Precision vs. Haleon PLC
Performance |
| Timeline |
| Hon Hai Precision |
| Haleon PLC |
Hon Hai and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Haleon PLC
The main advantage of trading using opposite Hon Hai and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| Hon Hai vs. Norman Broadbent Plc | Hon Hai vs. Broadcom | Hon Hai vs. Baker Steel Resources | Hon Hai vs. Dentsply Sirona |
| Haleon PLC vs. Impax Environmental Markets | Haleon PLC vs. Fair Oaks Income | Haleon PLC vs. Foresight Environmental Infrastructure | Haleon PLC vs. Norwegian Air Shuttle |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |