Correlation Between Hon Hai and Learning Technologies
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Learning 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 Learning 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 Learning Technologies Group, you can compare the effects of market volatilities on Hon Hai and Learning 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 Learning Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Learning Technologies.
Diversification Opportunities for Hon Hai and Learning Technologies
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hon and Learning is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Learning Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning 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 Learning Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Technologies has no effect on the direction of Hon Hai i.e., Hon Hai and Learning Technologies go up and down completely randomly.
Pair Corralation between Hon Hai and Learning Technologies
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 0.76 times more return on investment than Learning Technologies. However, Hon Hai Precision is 1.31 times less risky than Learning Technologies. It trades about 0.06 of its potential returns per unit of risk. Learning Technologies Group is currently generating about -0.01 per unit of risk. If you would invest 622.00 in Hon Hai Precision on October 27, 2024 and sell it today you would earn a total of 482.00 from holding Hon Hai Precision or generate 77.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Learning Technologies Group
Performance |
| Timeline |
| Hon Hai Precision |
| Learning Technologies |
Hon Hai and Learning Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Learning Technologies
The main advantage of trading using opposite Hon Hai and Learning Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Learning 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 Learning Technologies will offset losses from the drop in Learning Technologies' long position.| Hon Hai vs. SBM Offshore NV | Hon Hai vs. Wheaton Precious Metals | Hon Hai vs. Bloomsbury Publishing Plc | Hon Hai vs. Golden Metal Resources |
| Learning Technologies vs. Catalyst Media Group | Learning Technologies vs. MediaZest plc | Learning Technologies vs. XLMedia PLC | Learning Technologies vs. Ecclesiastical Insurance Office |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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