Correlation Between Hon Hai and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Panther Metals 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 Panther Metals 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 Panther Metals PLC, you can compare the effects of market volatilities on Hon Hai and Panther Metals 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 Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Panther Metals.
Diversification Opportunities for Hon Hai and Panther Metals
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hon and Panther is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Hon Hai i.e., Hon Hai and Panther Metals go up and down completely randomly.
Pair Corralation between Hon Hai and Panther Metals
Assuming the 90 days trading horizon Hon Hai Precision is expected to generate 0.43 times more return on investment than Panther Metals. However, Hon Hai Precision is 2.32 times less risky than Panther Metals. It trades about -0.05 of its potential returns per unit of risk. Panther Metals PLC is currently generating about -0.19 per unit of risk. If you would invest 1,106 in Hon Hai Precision on November 30, 2024 and sell it today you would lose (76.00) from holding Hon Hai Precision or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Panther Metals PLC
Performance |
| Timeline |
| Hon Hai Precision |
| Panther Metals PLC |
Hon Hai and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Panther Metals
The main advantage of trading using opposite Hon Hai and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Panther Metals 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 Panther Metals will offset losses from the drop in Panther Metals' long position.| Hon Hai vs. Global Net Lease | Hon Hai vs. SBM Offshore NV | Hon Hai vs. Solstad Offshore ASA | Hon Hai vs. Hansa Investment |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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